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To: blam
I have an MBA (non-financial), but this is a foreign language to me:

"Gold prices have surged this morning to their highest since October (over $1221) as leveraged hot money greatly rotates its repo-driven way out of risk assets and into Greenspan's alternative currency. However, there is a bigger problem for the biggest pairs trade that no one is discussing - apart from us - the decoupling of the long Nikkei, short gold trade as the repo market folds in on itself from the suck out of $80 billion in collateral by China..."

The italized parts are Greek to me. What's this in English?

4 posted on 12/09/2014 7:44:28 AM PST by Jabba the Nutt (You can have freedom or government schools. Choose one.)
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To: Jabba the Nutt

first of all, it’s the ravings of a lunatic, as ALL POSTS on that website are. Second, it’s very badly written, prizing glibness and certainty over a realistic depiction of events.

But broadly translating what he/she/it is saying:

leveraged hot money: hedge fund and trading desk capital moves in and out of investements very quickly, seeking rapid returns - greater than the cost of the borrowed money they are using to invest

rotates: when lots of investors move from one asset to another because of some perceived change in the investing environment it’s called rotation

repo-driven: just refers to one of the methods of financing positions, selling the collateral for cash, with a commitment to repurchase (repo) later at a prearranged price

Greenspan’s alternative currency: gold

decoupling of long nikkei/short gold trade: Nikkei has been seen as a risk-on trade, that would thrive if economic health was good, while gold prices would fall under those conditions, so long nikkei and short gold tended to move in the same direction, but apparently that relationship has changed of late

suck out of 80 billion: Chinese markets have been under sharp pressure, and in order to cover losses, leveraged chinese investors have sold positions, meaning those positions are no longer available as collateral for repo agreements


7 posted on 12/09/2014 7:55:08 AM PST by babble-on
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To: Jabba the Nutt

first of all, it’s the ravings of a lunatic, as ALL POSTS on that website are. Second, it’s very badly written, prizing glibness and certainty over a realistic depiction of events.

But broadly translating what he/she/it is saying:

leveraged hot money: hedge fund and trading desk capital moves in and out of investements very quickly, seeking rapid returns - greater than the cost of the borrowed money they are using to invest

rotates: when lots of investors move from one asset to another because of some perceived change in the investing environment it’s called rotation

repo-driven: just refers to one of the methods of financing positions, selling the collateral for cash, with a commitment to repurchase (repo) later at a prearranged price

Greenspan’s alternative currency: gold

decoupling of long nikkei/short gold trade: Nikkei has been seen as a risk-on trade, that would thrive if economic health was good, while gold prices would fall under those conditions, so long nikkei and short gold tended to move in the same direction, but apparently that relationship has changed of late

suck out of 80 billion: Chinese markets have been under sharp pressure, and in order to cover losses, leveraged chinese investors have sold positions, meaning those positions are no longer available as collateral for repo agreements


8 posted on 12/09/2014 7:55:08 AM PST by babble-on
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