Enzio's Clock - Comments

Well put. I might put as a

Enzio — Thu, 28 Jan 2010 22:30:06 +0800

Well put. I might put as a synonym: hush money... Equally unpleasant, no? I cannot see the fog lifting on certain insurers who got bailed-out, can you?

Occam's razor

redduncan — Wed, 27 Jan 2010 11:11:17 +0800

Democrats have a difficult election coming up and have been having a hard time fund raising. Making their current fund raising situation problematic. This is simply a shake-down for protection money.

Not a very pleasant thought but plausible.

Dear Mr. Leung,Thank you for

Enzio — Sun, 24 Jan 2010 16:34:29 +0800

Dear Mr. Leung,

Thank you for your erudite comments. I do not think that de-coupling is possible: markets and market sentiment are too inter-connected to allow for this, as I have suggested on numerous occasions over the years.

Another point that agrees with yours has been made by me since the massive stimuli began: the world is going into "L", which agrees with your concerns about the inability of only monetary easing helping things out in the long run.

Another point which I agree with you on is gold: it is a smart place to be. However, for the short term, if you agree with my view of a strong dollar, then gold represents more of a buying opportunity now.

Sincerely, Enzio von Pfeil

Decoupling?

rksleung — Fri, 22 Jan 2010 14:55:58 +0800

Are you arguing for decoupling from the US market then?

Correct me if I am wrong. I believe you were claiming that the rally since March 2009 is nothing but a mirage created by money pumping around the world. The money created so far in the US has been sitting as excess bank reserves in the commerical banks, rendering the government's reflation efforts only limited at the M0, M1 level. I believe that is why you were still clinging onto the "deflationary" backdrop theory as overall consumer debt is actually decreasing in the US.

If the US market's rally from March is to end here, why should HK and China's stock market be decoupled from it? Why would those chinese banks be a buy if HK and China's markets are to go down?

Technically, the market has been showing negative divergence for quite a while.
1. Shanghai topped in Aug.
2. HangSeng and selected European market like DAX has failed to reach yearly highs even though the DOW managed to hit its high a couple of days ago.
3. RSI for a couple of banks are showing negative divergence

Plus, the USD depreciated substantially from 2003 till 2007. See M3 (http*//www.shadowstats.com/alternate_data/money-supply-charts)
In a bid to retain its competitiveness, the China's central bank has been printing at a somewhat frentic pace to keep pace with money pumping in the US as evidenced by the above M3 chart. It culminated in 2007 Autumn pushing Shanghai to 6000, only to be slaughtered several months later. As Mises observed ages ago, money pumping just gave rise to boom and bust but nothing else. Fast foward to 2008 Autumn when everything got untangled, Chinese banks and commodity producers were hit hard. With the suspension of Mark-to-Market in March 2009 and the extremely oversold level, the market mounted a come-back amid another round of money pumping.

Are you to think that this round of money pumping would solve the crisis? I don't. Given the strengthening USD, it just lessens the need on the China Central bank to print as much. I think you may be one step ahead in recommending Chinese banks now.

I am of the opinion that we have hit the brick wall with regards to the debt burden in the developed world. Reflation efforts in the developed world will not bring back the goldilocks econ. Inflation will go to the unintended sectors like gold, and agriculturals. China banks? Wait till their interest rate derivatives go belly up (They are the counterparties to a lot of the interest rate swaps written by Goldman and the likes and you can guarantee who the winners will be) before you get your hands on them.

Enough of my 2cents and I will play safe and stay with my gold investments.

sorry for reverting so late,

Enzio — Tue, 17 Nov 2009 10:40:30 +0800

sorry for reverting so late, Shawn. Are you a hedgie, trade for your own account, or work for a large house?

Dear Shawn, a lovely city.

Enzio — Tue, 17 Nov 2009 10:00:40 +0800

Dear Shawn, a lovely city. I lived in Eugene, Oregon, for many years in my youth.

You are right re. the protectionist threat, and with any politicians anywhere, anything that gets the vote justifies the means...

Cheers Enzio

Hi Enzio, I am in San

roboyak — Mon, 16 Nov 2009 23:27:13 +0800

Hi Enzio,

I am in San Francisco.

So, I finished the first chapter of your book Myth One: Imports Kill Jobs.

Your conclusion is based on service sector growth, what if we dont get growth but instead get a contraction, like we've just seen in the Financial Services industry, what if this spreads to ther services industries, like software services etc. And what if those service jobs never come back due to over regulation, europe and india doing them better, bad politics etc.

That would seem like a reason that the politicans would get all protectionist to try and bring jobs back home.

shawn

Hi Shawn,Yes, Beijing will

Enzio — Mon, 16 Nov 2009 18:10:48 +0800

Hi Shawn,

Yes, Beijing will allow an appreciation - but only of 3% max. So I am not so sure that buying the RMB bond is such a keen idea.

Where are you based?

Cheers, Enzio

YUAN some?

roboyak — Mon, 16 Nov 2009 03:18:31 +0800

YUAN some? Heh heh...

Enzio do you think China will finally allow it's currency to appreciate against the dollar?

If so maybe we could capture some gains using this instrument from Wisdom Tree:

WisdomTree Dreyfus Chinese Yuan (CYB)

We get to hedge some of our exposure to the US$ and we get paid a lil chicken while we wait with it's hefty 1.8% dividend yield...

Any thoughts?

Cheers!

shawn

Hi Shawn, thank you for your

Enzio — Sun, 15 Nov 2009 18:23:43 +0800

Hi Shawn, thank you for your patronage. I will be delighted to hear your response to my findings about America's global trade surplus, and thank you for your reading time,

Enzio

the book

roboyak — Thu, 12 Nov 2009 10:35:15 +0800

Amazon just delivered my copy of your book...looking forward to digesting it over the next week.

shawn

Dear Shawn,Your ideas sound

Enzio — Thu, 12 Nov 2009 10:08:12 +0800

Dear Shawn,

Your ideas sound sensible, those pair trades, particularly your SDS & UUP trade, given my view of an imminent dollar spike thanks to a market crash. Long ago I learned that I am all right at strategy and pretty lousy at trading, so I'll have to leave this one to you.

All the best, Enzio

going nowher fast...

roboyak — Thu, 12 Nov 2009 00:38:12 +0800

Hi Enzio,

The title to this post/question should be "Going Nowhere Fast..."

Enzio if you plot the dollar index versus the S&P over the past year you will see, as you know, the inverse relationship between the two. This means that if you are a US citizen and holding dollars and invested in the US market you have gone absolutely nowhere this past year.

Should all of our equity investments be paired with a currency hedge to get a real absolute return instead of these fake paper returns?

Obviosuly Goldman and all the other big firms have been green lighted for the biggest carry trade in history to short US dollars and buy assets, leaving us regular old investors with a bunch of fake paper gains. Which will soon be wiped out again by the coming collapse you speak of...

With the emergence of all the various currency ETF's shouldn't we be pairing out trades with currency hedges so we can accumulate real gains?

For example, if you are issuing a short the market using SDS shouldn't we pair that with UUP [long dollar ETF]?

And therefore if you are issuing a go long the market using SSO shouldn't that be paired with a UUM [short dollar ETF]?

Obviously assuming the inverse relationship remains intack. At some point if the US economy ever recovers the US market and the US dollar should rise like Australia is doing now...no?

This may warrant a phone call with you...

Thanks!

shawn

location

roboyak — Fri, 06 Nov 2009 22:42:23 +0800

Hi Enzio,

I'm in San Francisco.

Cheers!

Thanks Shawn. I'll post my

Enzio — Fri, 06 Nov 2009 10:44:26 +0800

Thanks Shawn. I'll post my forthcoming appearances on teh website. Where are you located?