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Strategies & Market Trends : SiliconInvestor All Stars Forum

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To: Real Man who wrote (1503)	11/3/2007 11:41:49 AM
From: SouthFloridaGuy	Read Replies (1) of 1718

Yes, I agree. The carry trade, though, will only be broken when global growth shows signs of slowing as those are the currencies being invested in. So it depends on whether the U.S. banking crisis - and I don't use that term lightly because it is indeed a crisis - affects the rest of the world. The answer is yes it's just a matter of how long it takes the feedback loop to work itself and how long the authorities can stall the inevitable without gold going through the roof. The leading indicators for Japan are already way negative and European leading indicators are at 0. So for all intents and purposes the contagion has spread there. However, the irony is that in the short-term the carry trade could intensify precisely because Japan is back in the doldrums. My guess is 12-18 months as of the July credit crisis before the carry trade unwinds. Still plenty of time to make money in sectors that are relatively strong (i.e. Large Cap, Nasdaq 100, precious metals, EM etc). There is a lot of money to be made between now and then.

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