If you’re living in Japan, you should probably think about moving. It is a completely dysfunctional country. My favorite guy over there right now, Finance Minister Taro Aso (the guy who is going to rip his country a new one) came out yesterday and basically said, “We’re not going to intervene – yet.”
Guess what? The market understands what that means. That’s the big move that really caught people offside’s yesterday—the currency move. It stoked a massive mean reversion move on the order of five standard deviations in my model. What did I do? I took the other side of it. I’m very comfortable with #StrongDollar. I’m even more comfortable #ShortYen relative to the USD.
Bottom line is that it was a freak out day and you’ve just got to deal with it. There’s nothing you can do about it, other than make a decision. You’re either not going to be short the Yen and long the Dollar, or you’re going to do more of both which is of course precisely what we’re telling you to do.
(Excerpted from Hedgeye's morning conference call)