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The Exchange Weekend Trend Update: Is the US dollar Index the best way to put on a currency trade?

The DXY or US dollar Index is often brought up as a way to play currency fluctuations, particularly as a "safety trade". In this video, I take a look at how the DXY did in the Corona Panic of Q1, 2020 and how it's done since as compared to some other individual USD pairs available in futures form. As a trend follower, I track all the major USD crosses and don't follow the DXY. I see a benefit in the diversification, and as my video shows. There are extra returns to be had both in risk off, and risk on market regimes looking at individual pairs vs DXY. @Weston Nakamura this seems right up your alley and I'd like to know what you think is the best way to play currencies in risk on/off situations. 

Christopher Moir
Maker of random charts that seem important 2 years later

The problem there is that very few are "general" market participants are thinking insolvency is a thing. Therefore it is unlikely to show up in run of the mill indicators. When it is out of the market eye it necessitates looking in the weeds like OIS spreads or MOVE index <- which is VIX for US bond market.

The BIS Issues A Dire Warning: "We Are Moving From The Liquidity To The Solvency Phase Of The Crisis"

There are three certainties in life: death, taxes and the BIS - the central banks' central bank - warning about excesses from monetary policy (the most recent amusing example of this was last October when as we wrote, "Fed Announces QE4 One Day After BIS Warns QE Has Broken The Market"). Actually, to this list of 3 certainties we can add one more: central banks roundly ignoring the warnings from the central bank mothership.

That, however, does not prevent the BIS from continuing this trend of warnings, and today the Basel-based organization did just that when in its Quarterly Review publication it cautioned that the surge in financial markets following COVID-19 vaccine breakthroughs and the U.S. election has left asset prices increasingly stretched.

Sounding surprisingly similar to Goldman, which as we reported earlier today issued an almost identical warning, when it observed that its sentiment indicator is now +2.0 standard deviations above average...

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Real Estate and Unemployment

 There is NOT a lot of upside in real estate right now. There is actually a significant amount of disequilibrium. Once the delinquencies start to gain momentum, the US consumer will not be in a good place. This has implications for banks, homebuilders, and a lot of MBS securities. And the worst is yet to come. #bearish #reallybearishbro #doyouevenbearbro