We began a short position in U.S: Banks today. We think their run since the bottom of 2008 might be over. If the yield curve flattens out even more, their profits will begin to erode. Stocks are going down, they are afraid to buy bonds because of tapering, they have to keep more reserves due to the stress test, and they refuse to buy gold- yet.
So- we are long gold and short banks.
Crazy market. Hopefully when the Hedge-Fund traders are done licking their wounds on their momentum stock plays the last couple days, they will join our trade. That would be great. We can all make money;)
