What we’re reading (10/9)
“The Big Dollar Short Is Turning Into A Pain Trade For Investors” (Bloomberg). “Betting against the dollar has been the dominant trade this year in the $9.6 trillion-a-day foreign exchange market, but the wager is starting to stumble. The world’s primary reserve currency is around a two-month high even as the US government shutdown drags on, and traders in Asia and Europe say hedge funds are adding options bets that the rebound versus most major peers will extend into year-end.”
“Gold Screams ‘Debasement Trade.’ Bonds Say Otherwise.” (Wall Street Journal). “Debasement fears seem to be everywhere—except the one place they should be most obvious: bonds. Sure, there was a nudge up in global long-end yields this week, thanks to politics. Japan’s ruling party picked a leader who likes big spending and low rates, and France lost yet another prime minister after failing to reconcile the need to save money with a parliament that disagrees.”
“Insurance Companies Likely To Take Hard Stance On Non-Domiciled CDLs” (FreightWaves). “A change in insurance policies could be coming to the trucking industry, signaling a major shift in their approach to non-domiciled commercial driver’s licenses (CDLs). As enforcement of the new non-domiciled CDL rule takes shape, insurance companies are likely to position themselves to avoid potential liability exposure.”
“This Stock And Bond Portfolio Won’t Give You Bragging Rights — But It Does Make You Money” (MarketWatch). “A slow and steady approach to investing is better over the long term than ‘going for broke.’ That’s because of a mathematical fact of life that Brian Chingono, Verdad Research’s director of quantitative research, calls ‘volatility drag.’ By that, he is referring to the percentage gain it takes to recover from a loss. ‘A portfolio that is down 10% in year one and up 10% in year two has lost 1% of value,’ he wrote in a recent email to clients. Similarly, ‘a portfolio down 20% and then up 20% has lost 4% of value, and a portfolio down 30% and up 30% has lost 9%. Linear changes in volatility drive squared losses in total return.’”
“Used Car Prices Are Revving Up” (Business Insider). “There's sticker shock, and then there's whatever is happening with America's used-car market. Prices for a slightly-less-than-new-car have been soaring over the past few years. Before the pandemic, the average price for a 3-year-old vehicle topped out at a little over $22,000. In 2025, the cost is upward of $31,000. And according to Edmunds, which tracks the car market, that number may soon sound like a bargain.”
