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01-13-2016, 01:24 AM
It's actually quite straightforward. A good amount of FX brokers offer CNY/CNH cross pairs. You just have to google them up. Open an account and go. Really it's that simple.
IMO, I think there are better ways to play a yuan devaluation. Short Chinese equities, or equities in general. But if you believe the variance is better being short yuan, more power to you. For the record, I have no opinion on whether the yuan could go further down.
Be careful in FX land BTW, the dual regime of on/offshore yuan means things can get ridiculous. Google HIBOR Jan 11 2016. Good luck.
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01-13-2016, 07:04 AM
The reality is the Chinese economy has always been a complete smoke and mirrors show. In just 2010-2014 the Chinese poured more concrete than in the entire USA. You read that correctly. Its all top down infrastructure projects: airports, steel factories (govt company), subways, shopping malls, apartment complexes. The people don't make enough money to support a consumer economy.
In my city, a city you've never heard of 7-8 million, in the last 3 years 5 HUGE shopping malls that are nicer than anything Ive seen in Hong Kong have been completed. Prada, Gucci, Armani, Rolex, etc. Its empty. Every single day of the week. Saturday and Sunday people walk around, don't buy anything, go to the food court and eat a cheap lunch. I often study Chinese or walk around there and I asked one store how much their rent was, 36,000yuan a month. For a big space, but 6k USD just for rent, then all the other overheard, no customers. No way are they making money. If they are lucky its breaking even.
If the yuan doesn't go down it will be because the Chinese govt injects at least half a billion dollars into the economy. The next 3-4 years the global economy is going into the tank. If you didn't know that already, you heard it from ball don't lie first.
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01-13-2016, 10:48 AM
I would short the dollar.
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01-13-2016, 12:33 PM
"The people don't make enough money to support a consumer economy."
I wish I had the economic chops to develop this idea further. Because I think unpacking this idea would shed a lot of light on global development.
WIA
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01-13-2016, 02:40 PM
Quote: (01-13-2016 01:49 AM)Fast Eddie Wrote:
I don't want to derail this too much, but it's truly spectacular how much money you can make as a run-of-the-mill nobody in high finance. From Kyle Bass' Wikipedia page:
Quote:Quote:
Following a brief stint at Prudential Securities, Bass began working at the Dallas office of Bear Stearns, where he became a Senior Managing Director at 28, before leaving to become a Managing Director in Legg Mason’s Dallas office.
In December 2005, when Legg Mason sold the portion of the business where he worked, Bass left Legg Mason and started Hayman Capital Management, L.P.......
...snip
Bass’s first hedge fund was launched in early 2006 after raising $33 million from friends and family plus $10 million from his personal savings.
In 2006 Bass was 35 or 36, and already had "personal savings" that allowed him to plow $10mil into a hedge fund. In the video he says he put half of his net worth into the fund at inception, which means he had around $20m USD ($25mil in today's money) saved up during a completely anonymous 12-13 year career on Wall Street. Fuck how I envy those motherfuckers.
Guys in finance with wiki pages and UHNW status are not run of the mill nobodies. They are the top 1% in a profession that as a group is top 1% of the general population.
So this guy is a .01%er.
"Me llaman el desaparecido
Que cuando llega ya se ha ido
Volando vengo, volando voy
Deprisa deprisa a rumbo perdido"
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01-14-2016, 03:04 AM
@TheBeast: If China ends the peg, likely large 1 off devaluation. Look at Jan 15 2015 SNB example for reference.
@thoughtgypsy: Long USD/CNY should be possible, I've seen the pair offered at some brokers. Note I don't trade USD/CNY for the record. I can suggest short Chinese banks otherwise or some variation of who gets hurt/benefit from a weaker yuan.
My 2cents on high finance income: 20M liquid net worth in mid 30s is doable but extremely rare in high finance. These are usually hedge fund types. If a person makes MD, that suggest tenure of >10 years and base usually doesn't get anywhere near 1M/year until one is near MD. Even with a good year in bonuses, the average 2 years in associate is looking at possibly 500K pretax. And that's in a major Tier A city like NY with NY living expenses.
A more realistic projection is if you finished undergrad at 21, and at 35 you'd likely have 1-5M net worth. MDs do get well paid, however I almost guarantee you a MD in Dallas isn't making more than an MD in NY, unless Dallas MD oversees energy. And an MD is not middle management, far from it.
I'd be remiss if I didn't also mention that one sacrifices massively in finance. You are the bulge bracket firm you work at. It becomes you. It's not for everybody.
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01-17-2016, 07:40 AM
If I were you, I would stay away from FX. It depends too much on politics. You'll never know if some government will implement QE, move interest rates, etc. Unless you're an insider, you're gonna get burned.
People who do FX use leverage most of the time and they do it HUGE. They use $1000 of his capital and $100k as leverage. When it rises a little, he multiplies his money. When there's a little volatility, he loses EVERYTHING.
You might bet in a casino. Blackjack and European Roulette have better odds compared to FX if you're a rookie.
As for Hedge Fund managers making a fortune, they knew how to ride the wave. Without easy-money (QE/0% interest rates) the economy is going bad and there is plenty of Hedge Funds closing. [source: ZeroHedge].
Those managers made many many billions in commissions during the bubble.
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01-17-2016, 09:35 AM
Hedge funds also favour derivatives such as forwards, futures, swaps, and options above forex and simple equities. In 2008, it had to do with vehicles associated with real estate and people defaulting on their loans. CDOs and credit default swaps were (and likely still are) highly popular.
If there is a way to short the Chinese real estate market, that would be favourable. It's a clusterfuck over there, they have literally built cities of buildings that are ghost towns, in which many people own the property, yet have nobody living in them. The thought is that "real estate always appreciates in value" is going to hurt a lot of people.
I've been thinking for some time about shorting their currency, however, the United States is not much better off right now, and I can't institute an "insurance policy" on a currency nearly as easily as I could on an equity. Depending on what happens this week, I will likely look to short selective equities, while insuring them with out of the money calls just in case there is a rally. If this truly is a bear market, I would look to selling calls as well. Build up that margin account, it is likely the only way to make money in this market over the next while.
"Money over bitches, nigga stick to the script." - Jay-Z
They gonna love me for my ambition.
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01-17-2016, 10:03 PM
The DOWJ dropped over 7500 points in 2008, we're still a long way off from that. There are tons of ways to make money in this market, you don't have to simply buy stocks, there's so many other tools, and ways to hedge your risk. Sure amateur traders should gtfo, but the big dogs are gonna play this game all the way to the bottom and right back up again.
"Money over bitches, nigga stick to the script." - Jay-Z
They gonna love me for my ambition.
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01-17-2016, 10:57 PM
Chinese, japense, even aussi dollars are to tricky . imo logic does not apply constantly .
Adam says to God, "God, why did you make women so soft ?"
God says, "So that you will like them."
Adam says to God, "God, why did you make women so warm and cuddly?"
God says, "So that you will like them."
Adam says to God, "But, God, why did you make them so stupid?"
God says, "So that they will like you"
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01-20-2016, 10:12 AM
Folks, I have a question for those who do know about currencies - although, of course, everyone can add input.
Right now, I have several thousands of Euros in my bank. Now, when we take into account everything that is happening in Europe (rapefugees, struggling economy...) is it worth switching to American Dollars (which might increase in value if Trump wins, which I believe he will, honestly). Thanks.
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01-21-2016, 02:28 PM
Quote: (01-20-2016 10:12 AM)Irenicus Wrote:
Folks, I have a question for those who do know about currencies - although, of course, everyone can add input.
Right now, I have several thousands of Euros in my bank. Now, when we take into account everything that is happening in Europe (rapefugees, struggling economy...) is it worth switching to American Dollars (which might increase in value if Trump wins, which I believe he will, honestly). Thanks.
Do you live in Europe and pay for living expenses in Euros? If so, do nothing. If you switch to USD from EUR you mismatch your assets and liabilities. Don't do this unless you know what you are doing or don't need the money for a few years.
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01-27-2016, 02:21 PM
the last I heard, the PBoC is gonna defend against speculators shorting RMB with their reserve.