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11 2009 Friday Ramble

Posted Yesterday at 04:53 PM by Black Swan Capital (Black Swan Capital - Currency Market Advisors)

I noticed a Reuter’s poll today. All the top banks were asked to provide their guess on just how undervalued the Chinese currency—yuan- was against the US dollar. The average guesstimate was about 20%. That’s about 20% lower than my guess would have been, but no matter. What was interesting was their guess about when the Chinese currency would actually become convertible.

Drumroll………………………………………………..2020!

Man, that’s a long time for the nut-job newsletter writers (guilty as charged, but not of this crime) to be shouting the “US dollar will disappear.” I told you about one enlightened fellow who gives it a 10-year time frame before the buck goes bye-bye. But there is another, a guy at a yet another major...

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Oh yen, we wonder when…

Posted 11-18-2009 at 04:49 PM by Black Swan Capital (Black Swan Capital - Currency Market Advisors)

We are taking a little break today. In place of my usual ramblings, below is an excellent article by Chris Fournier and Yasuhiko Seki of Bloomberg laying out the case for a weak yen based on the very ugly set of economic fundamentals and debt picture facing Japan.

Maybe USDJPY goes lower as institutional money is repatriated back into Japan given rising domestic risk. But sooner or later we think Japan’s economic fundamentals will feed into the currency in a big way.

Nov. 16 (Bloomberg) -- The yen is poised for its worst tumble since 2005 as doubts about Japan’s fiscal footing double the cost of insuring its debt.

The price of hedging against losses on $10 million of the country’s bonds with...

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Triple-think currency payoff?

Posted 11-16-2009 at 05:02 PM by Black Swan Capital (Black Swan Capital - Currency Market Advisors)

Triple-think currency payoff?

Describing Russia, Winston Churchill said, “Russia is a riddle wrapped inside a mystery inside an enigma.” I wonder how he would describe modern China; I think it would be fun to hear that quip.

But on second thought, I don’t think we need Churchill for the task, as yet another fine Englishman—George Orwell—summed it up nicely with his definition of Doublethink:

“The power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them....To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long...

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China: Smooth-talking their way to prosperity

Posted 11-11-2009 at 04:35 PM by Black Swan Capital (Black Swan Capital - Currency Market Advisors)

For several years now most analysts have understood the way in which China reports their economic data. China says what its people, and often times the rest of the world, need to hear.

It can be argued, though, that a lot of the numbers spewed out in China are manipulated for the better, for the sake of social contentment. An older, third-party article on this topic can be found here.

But even when we’re talking about less concrete items, general comments on the action being taken to restore China’s growth, it seems as though officials are just trying to schmooze over whoever is listening.

For example, official comments warning of potential over-investment ask lenders to lend less freely so the...

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Bio: John (Jack) Ross Crooks Jr. is the president and Chief Trading Officer Black Swan Capital. Mr. Crooks has nearly 20 years experience in the currency, equity, and futures arena. Jack is a seasoned investment advisor who has held key positions in brokerage, money management, trading, and research. Mr. Crooks was also founder of Ross International Asset Management and General Manager of Plexus Trading, a discretionary money management firm, Ross International specialized in global stock, bond, and currency asset management for retail clients. Prior to entering the investment arena, Jack held various corporate finance positions. Mr. Crooks has written extensively on the subject of global currencies and international economics.

Trading Methodology: Black Swan's approach rests on three areas of analysis: fundamental, technical, and sentiment. Black Swan analyzes macro economic variables to develop an underlying theme. Black Swan also uses pattern recognition, wave analysis, oscillators, and inter-market correlations when examining price analysis over multiple time-frames. Prior to making a recommendation, Black Swan establishes risk/reward parameters by defining a stop-loss and a target for the position-vital to long-term success.

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Black Swan Capital

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