The Wall Street Journal reports that a secretive dinner meeting of top hedge fund managers took place recently, at which the subject was the euro going to parity against the US dollar. The gathering is dubbed the euro-dinner and the "short euro - long dollar" trade is characterized as a "career trade".
Yup... such is the level of financial reporting in the Murdoch Era.
Let's pause to reflect on these "news":
- Truly secretive meetings of market operators never, ever make it to the press. They wouldn't be secretive otherwise, would they now?
- A routine, white bread-peanut butter-and-jelly position in the major currency FX market is never a "career trade". This market is simply too huge and efficient to score a major killing.
- The euro is already down 11% from 1.52 to 1.35. It took the fear of bankruptcy (of Greece), insolvency (of the rest of the PIGS) and a huge badmouthing campaign in the US-controlled financial press to make it so.
- We know that lots of mark-to-market money has already been made on the way down, particularly in sovereign CDS, shorting bonds and shares - plus the plain vanilla FX positions. The first three markets are illiquid and - to my knowledge - short positions are still mostly open.
The Journal also mentions the euro-dinner took place at a townhouse and the menu featured lemon chicken and fillet mignon. Of course.. would you believe them if they said Bob's Greasy Spoon and Beefaroni?
Well, I say Gullibility Pie is on offer right now and it's being served on a silver platter, with all the trimmings. And it's free!
P.S. I don't really need cred, at least not for readers of long standing, but I should point out that I was talking about the dollar's undervaluation last November, when it went to 1.50. See this post: 2012 - Dollar At The End Of The World.