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alstry (35.46)

Here is some Good News!!!!!!

Recs

11

January 21, 2009 – Comments (8)

HONG KONG (MarketWatch) -- Japanese exports fell by a larger-than-expected 35% in December, the biggest fall on record, stoking concerns that firms could accelerate layoffs and idle production as the global recession deepens.

Now let's think about this for a second....."the biggest fall on record"......not the biggest fall in 30 or 50 years......the BIGGEST fall on record!!!!!!!

And that is Japan.....not America..........England on the brink of bankrupcty....country after country in Europe getting their credit ratings downgraded.........you think China's exports are doing any better......just ask dockworkers if you want confirmation.

Now for the good news....it apprears that Obama is NOT going to print his way out of this mess......as a poker player and a compulsive practicioner of Alstrynomics....that is my read....let's hope its the right one.

Let me repeat it for you one more time since some of you think I blog the same things over and over again.....

IT APPEARS OBAMA IS NOT GOING TO PRINT THE USA OUT OF THIS MESS!!!!!!!!!!!!!!!!!

Obama.....Obama......Obama!!!!!!!!!! 

8 Comments – Post Your Own

#1) On January 21, 2009 at 10:27 PM, alstry (35.46) wrote:

10:15 p.m.  China's economic growth eases sharply

The above just came out....now Alstry is blogging in real time.

 

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#2) On January 21, 2009 at 11:09 PM, MikeMark (29.57) wrote:

Yep. There seem to be some baby steps in the right direction. Let's hope and pray for more.

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#3) On January 21, 2009 at 11:13 PM, alstry (35.46) wrote:

First Volker......then Buffett.......could Ron Paul be next????.......then he would truly be a rock star.

 

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#4) On January 21, 2009 at 11:13 PM, goldminingXpert (29.47) wrote:

Glad to see you're pleasing the critics and pumping out the good news. Think, the number could have been -40%. This is a big win for Japan!

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#5) On January 22, 2009 at 1:07 AM, redneckdemon (< 20) wrote:

I have to admit to being a little confused about the current yen rate.  As a US Sailor stationed in Japan, today the rate was 88yen=1dollar.  I hear some things about Japan suffering in this recession like the rest of us, but as stronge as the dollar may be abroad, the yen is stronger and I don't know why.

Back on track, it's good to see you hard at work, Alstry.  Thank you for the news; good, bad, or Obama.

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#6) On January 22, 2009 at 2:17 AM, jahbu (89.85) wrote:

No worries!  Good ol Henry Kissinger has the solutions!

http://www.iht.com/articles/2009/01/12/opinion/edkissinger.php

Problem reaction solution

Jahbu

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#7) On January 22, 2009 at 3:04 AM, DaretothREdux (43.51) wrote:

If you are right, then that is the greatest news I have heard in a long time.

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#8) On January 22, 2009 at 3:29 AM, saunafool (98.77) wrote:

The yen is strong because all the parties playing the "Yen carry trade" over the past decade are cashing out.

Big investors (banks, hedge funds, etc...) were borrowing in Japan at very low interest rate (like 0.5%) and investing in U.S. commercial paper (those nasty Mortgage Backed Securities and Credit Default Swaps). The MBS would pay 5% or so, and the CDS would have a cost of 1.2% or so, providing a "guaranteed" return of 3.3%. (+5% for the MBS -1.2% to insure it with the CDS - 0.5% for borrowing the money in Japan).

Now, the trick with this "guaranteed" return was that it was all on borrowed money, so banks were taking huge leverage to bring in massive profits. Banks in the U.S. were making this trade on about 30:1 leverage (i.e. if they had $1 million in hard deposits, they were borrowing $30 million from Japan to play this game). Some banks in Europe went up to 50:1 leverage.

Now, they have to unwind all these trades. Trillions of yen were borrowed, and now that the debts are being settled (in Yen) it creates huge demand for Yen. More demand for Yen = higher value of the Yen.

A similar thing is going on with the U.S. dollar, as the funds sell their assets to cover these debts, the assets get turned into dollars, driving up demand (and the value) of the dollar.

So, both are strong because they were the two main players in this mess of financial wizardry. Maybe the Yen positions are unwinding faster, or maybe the yen is ending stronger because that is where all the money originated.

Think of it, all those Yen, swimming back upstream to their birthplace. Many of them dying along the way like so many Salmon....

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