Posted by: jhamon | September 14, 2009

MysteryHedgie: China to Probe Alleged ‘Dumping’ of U.S. Products

MysteryHedgie opines:

As Obama continues his high profile  activism on health care,  financial regulation, and global trade, the Chinese retaliation (shades of Smoot-Hawley for the historians, read here) is no surprise.  With the VIX trading at a 1 year low, the surprise would be if  this news is not ignored by asset markets.  If you are inclined to hedge, FXI options represent excellent value.  We’d also recommend reduction of gold/gold stocks or call sales against longs (gold volatilities are elevated and very spot price sensitive) as last week’s Barrick hedge buyback is to us more indicative of news at a meaningful high than at a trend midpoint.

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