As more and more details about Madoff’s Ponzi scheme are emerging, its repercussions are also spreading wide. It appears that a large number of charitable organizations are also effected by the scandal. More and more companies who managed money for those organizations are coming forward and admitting to investing with Madoff Securities. Also, many of wealthy individuals duped in the scheme, were supporters of charitable causes. In light of the scandal, looks like much of this money will not flow to its end users any more. This is one of the saddest footnotes to this still developing story. I mean, he lost a lot of money for banks, but it is not like they were doing much better on their own. Just look at the size of the bailout congress appropriated for financial industry. Entire banking community was just as bad in fulfilling their fiduciary obligations. Hedge funds, another sector effected by Madoff’s mad alchemy? It is expected that by the year’s end number of hedge funds that will have failed or closed in 2008 could reach 1000. They also don’t need another scapegoat for their own failures. But the impact on of this affair on some of the charitable activities in this country is both shocking and sad.
I don’t expect very much to happen next week, as explained in previous post. At least I’m using Christmas as an excuse to cut my week short. Regardless, some trading will be done over next few days.
I placed couple of buy orders in NZD-JPY, as this chart shows. Price movement has been wide and loose on this time frame, that’s why such large distance between the order. I would prefer to go long here on 1H charts, with smaller targets, but right now I don’t see a trade there. Not yet at least. It might change by the time Europe opens, so I’ll be watching that chart closely.
Another potential trade is in CAD-CHF.
If the move up happens, I’ll want to get in at 0.9150 looking for 180-200 pips. Just like always on Sundays, I’ll try to take advantage of any gaps that might form. Depending on what happens, tomorrow I will take a look at EUR-GBP short trade, as well as GBP-JPY short term long trades.
Mike K.
Hedge funds had the worst year on record, according to published reports. Redemptions are still very high, which drags the performance even lower. Yen rally last few months also caught most of them off guard. Massive losses. You are right, Madoff’s fiasco is a small problem, comparing to their own results.
Hedge funds this year were not any different than other institutions. Loosing year, just as markets tumbled. Commodities largely fell together with stock markets, and that surprised vast majority of money managers. I’m also sure not that many of them managed to predict these large moves in currencies. Some trend following funds could have done good, though. Reports will be coming out soon and we will see.
Mike, I will send you something about hedge funds. Might surprise you.
Thanks, man.
Looks really choppy right now. Taking all of this week off might be a bad idea. LOL.
[...] make me make up my mind. If I’m wrong and exit this trade prematurely, the trade outlined in Scandal is spreading, NZD-JPY should pick up the slack. It is just now reaching entry level. Yes, it very often takes [...]
[...] for it. Some pips were made yesterday, few more today. This is a trade form the post “Scandal is spreading“. It took about two weeks before my buy order at 54.20 was filled, and 2 more days to yield [...]