13 June 2013

Long USD Unwind : Disaster

  • Back in Singapore. Time away was disastrous. Caught being long USD and slow to exit. Given up all profits for the year. 
  • What annoys me most is that I was looking for this kind of move in Mar/Apr between 92-96 in the USD/JPY. Didn't happen then and I got sucked into the general Abenomics euphoria. Can only hope that next time a parabolic rise unwinds in whichever market, I catch it right using my bad experience from this time.
  • Somehow, when one is making bad decisions, it seems that really bad luck follows. (eg cut all long USD except for small position vs GBP. Why didn't I cut GBP instead of  Gold or Copper?)
  • Clear the decks and re-start the year in July.
  • I wonder how others are doing this round?


Don C said...

MAS reprimands 20 banks after review of rate-setting processes

"Setting aside additional reserves at 0% for 1 year when SGD rates are near zero = Bloody joke. Penalty? What penalty? Window dressing!"

Ha TS, that was how I reacted as well when I heard the news today.

But this is basically a reflection of the toothless financial regulatory framework we have, in place at the MAS as well as other govt regulators (think LTA, MDA, and their laughable 'fines and penalties' of SMRT, SBS/ComfortDelgro, SingTel, Starhub etc, of these mainly govt-linked-companies for their lapses and disruptions in critical services in the transport and telecomms sectors. I remember those literally lite-tap-on-the-wrist $10,000 fines for severe breakdowns in our mobile networks and train services some years back, even before last year's major incidents).

The toothless regulatory framework in the early years obviously worked to the benefit of the GLCs, which dominated local business and industry in all sectors at that time, and allowed them to operate with essentially a 'light-touch, hands-off' approach from the regulators, or if you prefer, a 'hand-in-hand' approach between these state-owned companies and the regulators meant to oversee them. But with our 'top talent' and govt scholars shuttling back and forth in positions and appointments between the various govt agencies, ministries, regulators, GLCs/SOEs, and ESPECIALLY, the uniformed services (army, airforce, navy, police), you eventually get a 'regimented' and obtuse system in place where the faces all look the same, and policies and even business interests all blend into one bland, risk-averse and unchallenged status quo.

Though in all fairness, the local finance industry has been mostly open and competitive, compared to the other captured local business sectors, naturally due to the major entrepot trading center Spore has always been, and the international finance center/hub we had always been striving to become.

Well, at least it now means that Spore-based banks/branches shall have that little bit more reserve capital put away, just in time for the highly-anticipated 'tapering' storms and monsoons to come...

Sorry for this useless little rant that went off-course.


Btw, hang tough TS.

Taichiseal said...

Good rant ... thanks Don