The Doomsday Cult Capitulation Trade: How Wrong Can The Economist Be?

The Economist’s Buttonwood column joins the doomsday cult capitulation trade:

The currency has gained more than 10% this year, hitting a two-year high against the yen last week and a three-month peak against the euro. This is despite an American current-account deficit even wider than last year’s and apparently reduced enthusiasm among Asian central banks for dollar-denominated assets. Buttonwood was among those early in the year who expected the dollar to go every which way but up. How wrong can a columnista be? Why didn’t the currency behave as she told it to? Don’t deficits matter?

Proving once again The Economist’s value as a contrarian indicator, the USD index fell to its lowest level since 10 October as Buttonwood went to press!

posted on 25 October 2005 by skirchner in Economics

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