If there's some nefarious conspiracy going on here it's in plain sight. Roger's has known about it AND TOLD THE PUBLIC that he had shorted US investment banks for well OVER ONE YEAR! So much for a surprise attack by the dark forces. http://www.bloomberg.com/apps/news?pid=20601109&sid=a2Rnaf9tZJbA&refer=home Aug. 3 (Bloomberg) -- The U.S. subprime-market rout that wiped out $2.1 trillion from global share values last week has ``got a long way to go,'' said Jim Rogers, who predicted the start of the commodities rally in 1999. This week's rebound in equity markets hasn't persuaded Rogers, 64, to pull out of bets that U.S. investment banks and homebuilders are heading for further declines.
Rogers is indeed the man. But I'm sure if you do an more exhaustive search you'll find he also disclosed his general rationale for shorting the I-banks. I'm guessing he trades hedge fund size lots so I doubt if he based the trades on anything like gut feel. No comments from the "Conspiracy Theorists"?
Commodities are the "real" values that we deal with in the financial system. The rest is mostly castles-in-the-sky and expectations... That is why the big commodities countries will go by relatively unscathed. Growth in China, India and Russia is NOT going away - and they are getting fed and constructed into their new lifestyles with commodities flowing into there. E.g Brazil has over the last few years shifted their "involvement" with the US economy significantly. During the last 12-15 months there has been a flight away from the emerging markets - because of the turmoil in the US unfolding and they had to shore up back home... but that doesn't mean that growth in the emerging markets is being thwarted.
Jimbo has also been short 10y bonds since a year, long CHF, long JPY, long China stocks. It's not like all his traders are guaranteed winners, although he acts like they are.
10 year horizon ... Would you be sitting on US positions from 2006-2007? Or would you prefer China positions?