is the u.s. dollar a "buy"?

[jk]

where's the risk?

If the Fed normally eases in response to a crisis, what role might hedge funds play in the next crisis?

I'm a rookie - so I'm just asking brighter minds here.

everybody asks but no one really knows. the information is buried in a myriad of positions, leverages, derivatives both listed and otc, with no entity having any oversight. no one knew what was going on at ltcm except the guys running it. ltcm was a large institution with a major market presence. there may be some small fish out there at this moment, some fund you've never heard of, going belly up because of some ill placed shorts and about to default on some otc derivative position, which will unbalance the counterparty, ......

[blazespinnaker]

After today I think the dollar is definitely not a buy.

[jk]

the dollar

After today I think the dollar is definitely not a buy.

i'm inclined to agree, blaze. the odds of the kind of crisis that would cause a flight to "safety" in the dollar appears somewhat less likely now than it did yesterday. but we still don't know how things will play out. the fed sounded a bit more dovish so the markets partied. but they said the data would drive them, so lets see....

there's a practical question for me. currently i'm 50-60% antidollar. should that be increased? i know that you [blaze] are entirely out of the u.s. dollar, so unless you're going to leverage you don't have to think about leaning further away from the dollar.

[Jim Nickerson]

Foreign Currencies

i'm inclined to agree, blaze. the odds of the kind of crisis that would cause a flight to "safety" in the dollar appears somewhat less likely now than it did yesterday. but we still don't know how things will play out. the fed sounded a bit more dovish so the markets partied. but they said the data would drive them, so lets see....

there's a practical question for me. currently i'm 50-60% antidollar. should that be increased? i know that you [blaze] are entirely out of the u.s. dollar, so unless you're going to leverage you don't have to think about leaning further away from the dollar.

jk & blaze, I'm 2.5% "anti-dollar, so do you think it is all right if I increase that exposure? Don't answer, I'm not asking for investment advice.

However, along the lines of being out of the dollar, as jk mentioned somewhere these Rydex Currency Funds FXA-Australia, FXB-Bristish pound, FXC-Canadian $, FXS-Sweden Krona, FXF-Swiss franc, FXM-Mexican peso began to trade on 6/26/06; FXE-Euro began trading last December, and then there is Rydex RYWBX that is valued opposite the US$ Index- which is weighted 57.6% Euro, 13.6% JPYen, 11.9% Can$, 9.1% Swedish Krona, and 4.2% Swiss Franc. RYWBX moves minus 200% of the Index. These are the purest plays of which I have any awareness.

A Brimelow column at Marketwatch.com http://www.marketwatch.com/News/Stor...Aden%20sisters

recently expressed the Aden sisters' opinion:

They don't like the U.S. dollar, either. They write: "The Euro and Canadian dollar are still our favorites, but the Swiss Franc and British pound are looking good too."

You know these pure Rydex currency funds also pay a bit of interest http://www.marketwatch.com/News/Stor...ss&siteid=mktw. e.g. Peso FXM 6.43%.

Any comments on why one or more of these is better or worse than the others or is something else better yet?

[jk]

leverage in rywbx

the major problem of rywbx is the leverage if you go through a period of price "noise." if the dollar goes down 1%, let's say, your position goes up 2%. if the dollar then goes back up 1%, you've lost some money on the round trip. you end up with .98*1.02= .9996. that doesn't look like much of a loss, but the little ups and downs tend to grind away the value of your position, so timing is more important with rywbx. [disclosure- i own some rywbx]