Monday, December 21, 2009
Where's Nouriel Roubini now on the "carry trade"???
Here was the that story November 2:
While this policy feeds the global asset bubble it is also feeding a new US asset bubble. Easy money, quantitative easing, credit easing and massive inflows of capital into the US via an accumulation of forex reserves by foreign central banks makes US fiscal deficits easier to fund and feeds the US equity and credit bubble. Finally, a weak dollar is good for US equities as it may lead to higher growth and makes the foreign currency profits of US corporations abroad greater in dollar terms...
But one day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments.
What happened Mr. Professor? We had a wonderful rally in the dollar--yet no bust!
And now the Professor says, instead of having 1929, we are now going to have 1937, when in fact we are like 1982, at the start of the bull market!
And at least you heard the 1982 analogy within the first week of this beast's bottom!
Care to come on Pimp TV and explain what happened to your dire prediction, Professor?
Or is it just another ZERO for the good Professor's predictions---again!!
Posted by Palmoni at 7:49 AM