C.O.B.R.A. January Portfolio Update
Currency traders continue to focus mostly on Fed policy and Jim thinks the Fed is tightening into a slowing economy. Tightening into weakness is what economists call a “policy mistake.” These episodes tend to be bullish for Treasury bonds, cash, gold, the U.S. dollar index, and select currencies like the Japanese yen. Fed policy mistakes are bearish for most other types of assets, so buckle up for more volatility. For now, Dan updates you on the open positions in the portfolio.