2015 was the year of considerable FX drawdown as desperate EM central banks attempted to rescue themselves from reality.
As Barry Eichengreen noted,
"Intervening to support an exchange rate that’s fundamentally overvalued is a fool’s game and a no-win situation, akin to a sovereign attempting to sustain an unsustainable debt burden rather than yielding to inevitable restructuring."
Moments after the Fed announced it would hike rates for the first time in 9 years on December 16, the ink on Yellen's statement was not yet dry and one after another bank announced it would hike its respective Prime rate - the benchmark rate on everything from small business loans to credit card monthly fees - from 3.25% to 3.50%.
The world’s most powerful media tycoon, Rupert Murdoch, is in the oil business nowadays. Murdoch is the founder of News Corp and Fox news who inherited his ‘news’ empire from his father. He now part owns an oil company with Lord (Jacob) Rothschild that is about to start drilling in disputed land between Israel and Syria. The Australian born American tycoon loves to promote war, chaos, fear, pleasure and nonsensical ‘talking points’ as news on his media outlets. His influence and power over politicians, and vice-versa, has always been legend.
Back in January we laid out the "two most crowded trades" in the hedge fund community as we entered 2015. The first was being long the US dollar, a trade which as we updated two weeks ago has gotten so big, it is now the biggest consensus trade by a factor of 3x...
... one which when it finally does blow up, will wipe out many macro and micro "hedge" funds who have been frontrunning the Fed's rate hike since mid-2014, and the second Yellen hints at a rate cut or worse the shockwave from the USD liquidation will be felt around the globe.
Today's market summed up...
The post-Christmas period started badly with a Bloodbath in Beijing... Biggest drop since August collapse