Tag Archives: carry trade

ICELAND: Main reason for capital controls was the carry trade; ‘glacier bonds’ amounted to 50% of GDP

Posted on June 5, 2011 by stacyherbert| 6 Comments

Stacy Summary: Great piece at Ed Harrison’s Creditwritedowns today on Iceland.

The main reason given for the imposition of the capital controls in late 2008 was the carry trade. The idea was that, without strict controls, the holders of “glacier bonds” equivalent to about 50% of GDP would rush to unload their holdings thereby making the Icelandic króna plunge even further, as if the 50% depreciation from peak to trough surrounding the financial crash was not enough.

This is contrary to the adamant assertions from the Kaupthing Bank economist who suggested Max take an Economics 101 class when Max warned in 2007 that the glacier bonds / carry trade would explode and devastate the economy:

→ 6 Comments

Posted in Headlines

Tagged capital controls, carry trade, iceland

‘Acts of Desperation’ & Hyperinflation Trades

Posted on May 19, 2010 by stacyherbert| 232 Comments

Stacy Summary: The ban on naked short selling in European government bonds and Germany’s 10 largest banks is apparently in place until March 31, 2011. Via @NicAbbo77 here is text of German ban on naked short selling. Regardless, the turmoil doesn’t seem as bad as post Lehman as many were warning yesterday and gold is off its all time euro high. It seems to me the argument from bankers is that we are in an Afghan poppy like corner – we have to let the warlords grow poppies or else there will be Taliban chaos! Failed states, failed markets. Or as Max says, “Without fraud there would be no markets” **UPDATE**: The final headline is from Denninger; and he says that there is also a ban on naked shorting of gold.

→ 232 Comments

Posted in Headlines

Tagged carry trade, germany, gold, naked short selling

Currency wars, carry trades and IMF gold

Posted on November 25, 2009 by stacyherbert| 20 Comments

Stacy Summary: The next stage of the global crisis is clearly happening in the currency grid, led by the collapsing reserve currency.

Russia to cut rates to fight carry trade speculators

India may buy remaining IMF gold (h/t @snipertrader)

→ 20 Comments

Posted in Headlines

Tagged carry trade, imf gold, india, russia

IMF says ‘dollar overvalued,’ funding carry trade

Posted on November 8, 2009 by stacyherbert| 65 Comments

Stacy Summary: All are speaking as one on the dollar. (Sounds to me like they are encouraging more speculators to pile in on a ‘one way bet’.)

IMF says dollar funding carry trade, still overvalued

“There are indications that the U.S. dollar is now serving as the funding currency for carry trades,” the IMF said in a report published yesterday. “These trades may be contributing to upward pressure on the euro and some emerging-economy currencies.” While the dollar “has moved closer to medium-run equilibrium,” it is still “on the strong side.”

→ 65 Comments

Posted in Headlines

Tagged carry trade, dollar, imf