In essence, they’ve all moved out the spectrum of, guess what, our old friends: liquidity and credit. Nobody is long dollar/yen anymore and it’s at 135.Įveryone has rotated out toward the middle of the lake where the ice is thinnest. Next thing you know, everyone and their grandmother is long dollar/Taiwan, dollar/rupee, and dollar/rubbish, yet they don’t remember why they have dollar/Asia on in the first place. Then it’s dollar/Malay, dollar/Korea, dollar/Phillippine peso, and so on. They buy dollar/Thai and go through the same process. Traders have a very hard time buying something at a greater value than what they just took profit on, so they look for a proxy, or relative value. By now dollar/yen has gone from 80 to 100 and it looks to be on its way to 120, but everyone took profit when it was in the 90s. As dollar/yen continued to rally, they were left watching their macro call run away from them without position. The trade is solid and the theory behind it is sound.ĭollar/yen started to go up as expected and the people involved cashed in their profits, but they took their profits too early. In the frozen ice theory, this occurs at the sides of the lake where the ice is thickest. It was clear to everyone that the dollar/yen exchange rate was the wrong price at 80.Įventually, traders started buying dollar/yen in anticipation of yen weakness. The economy in Japan was sliding, they had repatriated all their money, politicians were protesting the level - bloody, bloody blah. Everyone was blaming everything that was wrong in the world on the yen’s strength. Go back to 1995 when the Japanese yen was trading at an all-time low of 80 to the dollar. I have this theory on liquidity, relative value, and markets that I call my “frozen ice theory.” It also highlights the dangers of negative gamma - again! The frozen ice theory goes like this: When a lake freezes, it’s thicker at the sides than at the middle right? Here’s the currency specialist’s take on liquidity and risk, from Drobny’s book Inside the House of Money : Liquidity is risk, and should be looked at as such in your analysis process. The inability to get out of a losing position due to illiquidity is a soul-crushing experience. This is mostly because, as Mark’s notes, “liquidity is ephemeral.” It has a tendency to be abundant, most of the time… except for those times when you may need it most. Traders and investors often discount liquidity’s importance as an input in their decision making process. If that’s the case – and I’m sure it is – then the asset can’t be described as being either liquid or illiquid. But if you want to sell when everyone else wants to sell, you may find your position is totally illiquid: selling may take a long time, or require accepting a big discount, or both. If you want to sell when everyone else wants to buy, you’re likely to find your position is highly liquid: you can sell it quickly, and at a price equal to or above the last transaction. In other words, the liquidity of an asset often depends on which way you want to go. Or one day it can be easy to sell but hard to buy, and the next day easy to buy but hard to sell. One day it can be easy to sell, and the next day hard. An asset’s liquidity can increase or decrease with what’s going on in the market. Liquidity is ephemeral: it can come and go. Usually an asset isn’t “liquid” or “illiquid” by its nature. It’s often a mistake to say a particular asset is either liquid or illiquid.
#Elsa gets hurt ice skating game how to#
Great job, Doc! Now why don’t you ladies go to the next page of the game and find a cute new dress and a matching pair of skates for cute Elsa so she can go skating again? Enjoy playing the ‘Elsa Skating Injuries’ game on DressUpWho.( Note: If you’re interested in learning how to gauge liquidity and sidestep the next market selloff, then download our Liquidity Tracking Guide here.) Apply an ice cub over her swelling and then use a cotton ball with some antiseptic solution to clean up her blood and to also disinfect her wound and then bandage it so it can heal. Check out the injuries and then take a pair of sterilized tweezers to remove the little ice pieces that got into her wound. Now she needs you as her trustworthy doctor to cure her – can you help her out, ladies? Step in getting the ‘Elsa Skating Injuries’ game started and first of all, help cute Olaf remove Elsa’s skates. With her purple ice skates on and dressed up really, really nice Princess Elsa started skating around! It was something fun Elsa tried for the first time on her life, but because she wasn’t careful enough she lost balance and injured her foot. Cute princess Elsa had a great idea this morning! She used her magical powers to make her personal ice rink and once everything was ready she started enjoying it in a big style.