Casual Trading

The Unraveling QE Trade

SeekingAlpha |

In Brief...

The QE trade continues to unravel as investors recognize that QE doesn't really have any inflationary impact at all. Most markets have reversed to their pre-QE2 levels including the dollar, bonds, and many commodities. China is off 14%, cotton futures have crashed 41%, the CRB index is off 9% and the dollar has rallied over 5% from its lows. The dollar unwind continues as leveraged shorts get squeezed out of positions they never should have entered in the first place (via Zero Hedge, click to enlarge image): This is why we are currently seeing a massive unwind in the dollar short carry trade, and why once again rumors that macro funds are slowly and quietly receiving billions in margin calls behind the scenes..

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