Wall St trading desks on leverage are contributing to their own demise!
First, a lot of them bet on $200 oil and $9 corn. Second, they betted on each others' demise through CDS. Third, they betted on a strong euro. And finally, they're betting on a strong yen.
Ironically the yen is at the heart of all the prior bets since a cheap yen fueled easy borrowing. Now, you have the currency trading desks bidding up a strong yen while the arb and prop desks frantically try to unload their losing trades. And this is going on in the same house!
``An intervention to change the yen's rising trend would be like trying to stop a tsunami with one hand tied behind your back,'' Toru Umemoto, chief currency analyst in Tokyo at Barclays Capital, said in an interview on Oct. 28. The unit of London-based Barclays Plc is the third-largest foreign-exchange trader.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aJ.S4s.NPFWo&refer=home
0 comments:
Post a Comment