THE SHAKEUP - We definitely are living in interesting times. Monday will go down as a day to remember. All of this was long overdue and none of this is shocking. But I must admit, when you see such moves as they are happening, it can be quite frightening to watch. When fear and panic take over, there is very little that can stop them in their tracks. It's crazy to think how this can happen so quickly, but again, this was a long time coming. The moves are a culmination of the fact that we are now living in a world where central banks and governments have simply exhausted all options in terms of artificially supporting markets and with nothing left to support them, and with the global economic outlook still uncertain, this quickly becomes a recipe for disaster. China is at the front an center of all this. The rapid deterioration and loss of confidence in this economy is fueling a mass exodus of investment in the emerging economy and this is weighing on risk correlated economies across the globe.
UNDERSTANDING THE BUCK - And so, this helps to explain why we are seeing Dollar strength against some currencies and weakness against others. Risk correlated currencies are flying into developed currencies and the Buck is benefitting from the safe haven flow. But the more developed currencies, like the Euro, Yen and Pound, are all benefitting from these flows as well, along with the flows out of the US Dollar on what looks like it will be a delayed Fed liftoff. I have been waiting and waiting for this shakeup for quite some time and finally was able to capitalize on Monday through my short SPX500 position. Looking ahead, I think it might be a good idea to stay on those sidelines and wait for the next great opportunity. The volatility is definitely welcome, but we need to be careful and pick our spots wisely. I have no exposure at the moment and I am currently writing this update on a flight down to Orlando. JetBlue Fly-Fi is pretty cool and looking forward to taking the kids to Disney for their first time. Hope everyone is doing well.
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