Archive for March 31st, 2010
Let’s Count The Numerous Reasons To Hate The Yen
(This guest post comes courtesy of The Mad Hedge Fund Trader)
”Oh, how I despise the yen, let me count the ways.” I’m sure Shakespeare would have come up with a line of iambic pentameter similar to this if he were a foreign exchange trader. Those who followed me into a yen short at ¥88.5 on March 5 and held on until yesterday’s low of ¥93.25 are looking at a profit of 5.1% and a home run of 25.5% if you went with my recommended 500% leverage with a stop.
If you bought the leveraged short yen ETF (YCS), you clocked 10.4% on the move from $19.25 to $21.25. It beats the hell running with the lemmings in the S&P 500, doesn’t it? We are now within reach of my initial target of ¥95, which we could see as early as Friday. Those with hot hands who have been unable to sleep since they strapped this baby on might want to cash in there.
Others who are in for the long haul can sit back, get comfortable, and dig into the first chapter of Lady Muromachi’s 1,000 page Tales of the Genji. To remind you why you hate the Japanese currency, I’ll refresh your memory with this short list:
* With the world’s weakest major economy, Japan is certain to be the last country to raise interest rates.
* This is inciting big hedge funds to borrow yen and sell it to finance longs in every other corner of the financial markets. Notice that the euro/yen cross has popped from ¥121 to ¥125 in the last three weeks.
* Japan has the world’s worst demographic outlook that assures its problems will only get worse. They’re not making Japanese any more.
* The sovereign debt crisis in Europe is prompting investors to scan the horizon for the next troubled country. With net net debt at 100% of GDP, Japan is at the top of the list.
* The Japanese long bond market, with a yield of 1.2%, is a disaster waiting to happen.
* You have two willing coconspirators in this trade, the Ministry of Finance and the Bank of Japan, who will move Mount Fuji if they must to get the yen down and bail out the country’s beleaguered exporters.
This is all why, after catching a breather at ¥95, we’re going to ¥100, then ¥120, then ¥150. That works out to a price of $37 for the YCS, but it might take a few years to get there.
If you think this is extreme, let me remind you that when I first went to Japan in the early seventies, the yen was trading at ¥305, and had just been revalued from ¥360. If we get a surprise with Friday’s nonfarm payroll figures, and you get a pop up in the yen, use the gift to increase your shorts in the futures and the (YCS). And no, this prediction is not an April fool’s prank.
Get more market commentary at The Mad Hedge Fund Trader >
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Chinese Farmer And Son Light Themselves on Fire To Protest Land Sale, And The Shanghai Bulldozers Pause For Just Two Hours
Moral amnesia is one of those signs of a telltale bubble that doesn’t show up in official statistics.
When people become indifferent or ignorant about actual human suffering, that might be all you need to know.
So it is with that in mind that we present this Shanghai Daily piece (with key parts bolded by us) that’s just chock full of moral amnesia in real-estate crazy China.
Behold:
FARMER Tao and his 92-year-old father set themselves on fire when a
100-strong team led by a township chief set out to tear down their home
and their pig farm.
The farmers had found the compensation they were being offered far too
low.
The son died and the father was injured – but, according to Beijing
Times, that did little to distract the team from their destructive
mission.
Yes, the incident caused a two-hour delay, but the home and the farm
were pulled down while the remains of the victim were still lying
nearby.
The job was certainly carried out in a professional manner.
For instance, prior to the assault, a curfew was announced immediately
around the affected area, and other members of the family had been
escorted out of harm’s way.
This happened on Saturday in Huangchuan Township, Donghai County,
Jiangsu, but it can be happening anywhere today.
One report suggests that officials there wanted to have the demolition
completed before April 1, when a new relocation law would make forced
relocation more difficult. This is likely an exaggeration of their
respect for law.
That a villager chose to end his life in such a violent way can only
dramatize the futility of any resistance.
The futility of their resistance. Classic.
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Where In The World Is My iPad? (AAPL)
Twitter has been buzzing with eager Apple fanboys anticipating the arrival of their iPads this Saturday.
Judging by these reports, here is how iPads are making their way to your home:
- iPads are being shipped from Foxconn’s notorious factory in Shenzhen, China.
- From there, the iPads destined for the U.S. fly to Anchorage, Alaska.
- Finally, they head to Lousiville, Kentucky.
- After that, UPS explains that your tablet is dealing with “UPS Internal Activity”. In other words, it’s right in your backyard, but Apple won’t let them give it to you until Saturday.
Follow an iPad on its journey from Foxconn to purgatory at a UPS location near you >
iPads are shipping out of Shenzhen, China, home of the controversial Foxconn factory where iPads are made
What people are saying about Shenzhen:
joshbaltzell My iPad is in SHENZHEN, CN en route to my doorstep. To celebrate I think I will have iPad Thai for dinner.
mkohpotts my iPad still has origin scan only in ShenZhen. I’m a tad worried. Hopefully it will hop on a plane soon and get its tush over here by Sat.
socratic All eyes are on SHENZHEN, CN. #ipad
Next stop: Anchorage, Alaska, gateway to America
What people are saying about Anchorage:
tsmarsh The iPad is free and just checked in at… Anchorage?
MauiCountyJr Itunes 9.1 update for Ipad installed, My Ipad is in ANCHORAGE, AK 4 Days to go! 
fanzoo Tracking for my iPad now says it’s in Anchorage, Alaska. I wish I was going on this trip too. I miss Alaska
From Anchorage, your iPad will probably head to Louisville, Kentucky. After that, it depends where you live.
What people are saying about Louisville:
driver49 My #iPad arrived today in Louisville, KY. Can’t I just drive up there and pick it up?
kroneil One iPad in Louisville, KY the other in China… you better get a move on little China iPad if you’re gonna make it here by Sat!
rubinajo Earlier UPS showed my iPad was in Louisville. Now it shows that it left Anchorage and was never in Louisville. Magical machine indeed!
That’s how your iPad will get to you. But what will it be like once it gets there?
10 Burning Questions about the iPad >
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Vanity Fair Ruins Tiger’s Return To Golf With A Huge New Expose About His Mistresses
Just in time for Tiger’s return to the Masters, it’s a new expose from Vanity Fair.
The magazine hasn’t put its full story online yet, but it teased out a bunch of details, like this one (gross):
[Tiger Woods mistress] Mindy Lawton says she met Woods for one rendezvous at 5:30 in the morning, before he had to leave for a golf tournament. Although she was menstruating, he insisted on having sex with her, but when the key card to access his office didn’t work, he drove to a nearby parking lot, where they had sex in his car. After they left, Lawton claims, reporters from The National Enquirer, who had been following her, picked up the tampon she had dropped in the parking lot, and later threatened to use it as part of a story exposing Woods’s infidelity. When the tabloid contacted one of Lawton’s relatives, Lawton texted Tiger in a panic, and he put her in touch with Mark Steinberg. “That’s when their brush-under-the-rug, the cover-up, happened,” Lawton says, referring to a deal that the Enquirer allegedly made with Tiger’s handlers to hold the adultery story in exchange for Woods’s giving an exclusive interview to its sister publication Men’s Fitness. (A spokesperson for The National Enquirer denies that the paper held the Lawton story in exchange for an exclusive on Tiger.)
There’s a whole lot of other salacious details at Vanity Fair >
Here’s a video interview with the author of the story, as well as footage of the photo shoots done for each mistress featured in the story:
See Also: 20 Raunchy Text Messages Tiger Woods Sent To His Mistress Joslyn James
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See Also:
- 20 Raunchy Text Messages Tiger Woods Sent To His Mistress Joslyn James
- 10 Questions Tiger Woods Must Answer On April 5
- Tiger Woods’ Mistress Dribbles Out More Personal Text On The ‘iBone’
A Recap Of The Huge Shipping Rebound You Might Have Missed, And Why It Matters
As far back as September 2009, there was a highly noticeable uptick in U.S. container shipping volume. Then in October, shipping observers spoke of rising freight rates being pushed by ship owners.
As rates rose, there then came a rumor that shipowners were beginning to pull substantial numbers of ships out of dry dock, due to a major pick up in container trade demand they were experiencing.
Shippers started to complain about a shortage of ships to carry their growing number of goods.
Two weeks later the rumor above was then confirmed, ships were indeed being put back into service in large numbers:
According to AXS-Alphaliner, the idle fleet has been further reduced over the last two weeks, from 495 vessels of 1.24m TEU to 474 vessels of 1.22m TEU (9.3% of fleet capacity) currently. AXS-Alphaliner expects lower idle count going forward, as new services will be launched on the Asia – Europe trade (capacity on this route expected up 7%) and there is also a pickup in demand for smaller ships to service intra-regional trades.
Moreover, a major rebound wasn’t just seen for U.S.-Asia (Transpacific) trade. Asia to Europe was seeing strength as well, with higher volumes and most importantly higher rates:
And even now, despite the warnings ahead of time, containers are piling up at ports because trade growth jumped far quicker than the industry adjusted itself for.
Just be aware that there are still risks.
Maersk, for one, isn’t quite sold. They think the strength of the rebound can’t be sustained.
But really the risks mostly have to do with the industry expanding its shipping capacity too quickly in response to surging trade demand.
In terms of what this all means to the rest of us, the growth in trade demand is real and good news. Even if shipping companies end up getting too excited and bringing out too many ships, well ahead of further trade growth.
Because, it’s important to remember that a sharp drop-off in trade called the U.S. economic crisis back in 2007:
Myself, at Citi, June 2008:
Back in 3Q07, Asia-US container volume weakness was a decent indicator of hard times to come. We believe that the latest further deterioration in US and increasingly European data means that for container shipping, “We ain’t seen nothin’ yet”.
Latest data based on an aggregate of five major US west coast ports shows import volumes down 8% year to date for 4M08. 1Q08 PIERS compiled data for the US overall shows a similar trend with 6M trailing volume down 2.5%. Any way you slice it, the US demand slowdown is worsening.
Thus a sharp rebound in trade demand calls a recovery.
Get more like this: @vincefernando
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See Also:
- Packed Containers Piling Up At Asian Ports Because There’s Too Much Demand From West
- And Now Air Traffic Is Nearing Pre-Recession Levels
- Rumor Confirmed: Idle Ships Pouring Back Into Service In Response To The Global Rebound