ThePanelist.com - Out of Yen and Selling to Hedge Funds in Liquidation

Out of Yen and Selling to Hedge Funds in Liquidation

Written by David Neubert

Thursday, 16 August 2007

Photo:MShades, Creative Commons, Flickr
I've been away in Kauai until Tuesday night, and since I've been back I've been trading furiously. I'm usually only this active in my personal account when the Russell Indices rebalance every June.

The first of my trades is actually the most recent.

About a half hour ago I sold out my entire long Yen (short US Dollar) position. I was betting on an unwind of the yen carry trade (carry trade is where investors borrow yen at low rates like 1% and lend in dollars at a higher rate like 5%). I had been betting on this unwind (and losing money) for about a year and recently increased the position.

Disclosure: I have no position in the Yen currency. I am still short British Pounds (a.k.a. cable).
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Photo by Jesse Braun via Flickr and Creative Commons
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David Neubert

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Comments (3)

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written by Shine , August 19, 2007

So does this suggest that you think the rise in the Yen is over and that the carry trade has unwound, or are you just cashing in early?

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written by David Neubert , August 20, 2007

I feel that the majority of panic unwinding is done for now. All else equal, if the Yen were to significantly weaken again (near to 120 or more) as the undwind trade is put back on. I'd go long Yen.

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written by Adventures In Money Making , September 17, 2007

do you think the USD will strengthen when Ben drops the interest rates?

Isn't that what happened when Greenspan did the same in 2000?

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