What to Trust – The Golden Rule.
It perplexes me what is happening now. Chaotic markets everywhere and even stronger correlations than ever on risk on and off trades.
Gold has collapsed with the eur, usdjpy, oil and stocks.
The only things rallying are bonds and the Usd.
When I wrote about the euro a month ago, I certainly had no inkling it was going to transpire into an ugly meltdown. After all these years, markets are still markets – the wisdom of crowds ?
Still left with the USDJPY trade which has luckily survived as Fitch downgraded Japan today.
Honestly, I am fast running out of reasons not to tear my hair out and wonder what we can believe in anymore. And increasingly, I notice the articles are getting more Philosophical than ever; less Prescriptive, with a dash of Resignation thrown in and some bordering on a certain Despair. There is not a single piece of good news ‘cept fothe odd US economic figure that keeps the world hanging on a thread.
With the largest anticpated IPO of the decade, Facebook, now 20% underwater, yes, there appears to be nothing we can trust with the exception of, Heavens forbid, the USD ?
In the haze of my confusion, the only light I see is the safety of Gold, which has surprisingly performed quite miserably this month for the perverted reason of its place in the risk-on correlation basket.
Nothing can be more neutral than Gold right now and its unencumbered non sovereign alignment . In times like these, after an egregious lesson in patience last month on my EUR short trade and a strong urge to buy some Facebook at current levels, I will stick to basic survival instincts.