The collapse of the yen carry trade.

I have read that numerous places and it seems plausible but it is beyond my investing experience.

I think the new nominated Fed Chair is also a hard money advocate and is spooking USD alternatives (gold, silver, BTC, etc.) But hard money can be quite hard on the economy, so that could limit growth.

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robocat a day ago | parent [-]

We should just blame "the willies".

Investment is all about belief. When the root cause is the willies, then we hallucinate reasons together.

Crypto and memes have demonstrated us a lot about the drives of individual investors.

Unfortunately it seems that professional investors are not that much more rational (from my limited personal experience with a small hedge fund, and from my years of looking at markets).

My favourite term has always been "taking profits" which is generated by the technical analysis (I loath that term) of looking at the prices: taking an effect and publishing a cause (trying to sound smart).

We are deeply irrational beings; often the more you go up a professional ladder the more rationalisation you see.

During unstable periods, we see lots of weird side-effects and there is a lot that doesn't seem to make sense.

Edit: a better meme could be "The use of AI by funds is destabilising markets"

Disclaimer: I am not a professional investor. I am a cynic.

	▲	mullingitover a day ago \| parent [-]
		Speculation involves belief, sure. However, there is hard math involved in markets as well, and the yen carry trade equation exists whether you believe in it or not.

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AnimalMuppet 21 hours ago | parent | prev [-]

Not saying you're wrong, necessarily, but as I type this the Dow is at 49,700. Would you expect the collapse of the yen carry trade to cause the Dow to collapse as well? Or is the Dow not high-growth enough for people to put yen-carry money into it?

	▲	mullingitover 20 hours ago \| parent [-]
		> Would you expect the collapse of the yen carry trade to cause the Dow to collapse as well? USD devalued ~10% last year, so some of the losses are already priced into the DJI. When you account for that and sprinkle in ~3% inflation, it has lost value despite being up ~11% in the last year.