Could John R. Taylor, Jr be more wrong? - take 2

Another example of John R. Taylor, Jr economic ignorance who happen to have founded and being managing the biggest Forex hedge fund in the world.

Here are a few quotes:

"Bad job report is a bad number but not so bad. It's a goldilocks for the rest of the world, so the rest of the world will be able to grow."
[...]
The $ is strengthening because Europe and Asia are growing so much more quickly than the US.
[...]
The Fed has to do more, something like QE.
[...]

I won't bother commenting these ones as they are so obviously non-sensical.

We have an advantage is that we control our currency, so we can make it go up and down, and we can do whatever. And we do. That's the reason why it's been going up lately. We're happy to have it like this, with the weak dollar.

First of all, who is "we"? It's certainly not him. Then, the Fed doesn't really control the value of the dollar, nor does the US government. The market does. So he's got it completely wrong. The Fed only controls short term interest rates. Finally, the dollar is weak, but not because "we" wanted it. The dollar is actually a lot higher than it was back when the rates at the Fed were at 4.25%, just proving him wrong: the Fed didn't manage to sink the dollar the way it wanted.

One things that worries me is that he's long the Euro and that he thinks it's going to somewhere between 1.32 and 1.35. I'm really worried now because he has almost the same target as me. As John R. Taylor has been a pretty good contrarian indicator. My target was 1.35 and 1.40. It could mean that we'll go higher than that...

Why was the dollar rising? because people who have debt in USD need to buy dollars to pay the loans which do not revolve...

Oh my... Oh my... if that were the case, you wouldn't see 15% rallies in the USD within a month or two, but during a multi-year process... The reasons why the dollar rallies are manyfold, but the three main components are:

• Dollar carry-trade unwinding
• Rushing into US treasury bonds
• Sentiment

Oh, and another scoop:

Bloomberg Anchor:  Which other European countries are going to default?

His answer: Greece and Spain

What a genius. Who could have seen that happen, a few months after it actually did happen?

I will give him some credits though: He forecasts that the "the dollar will be weak, but only for a couple of weeks". Then the dollar will strengthen into the year end. This sounds reasonable to me, and just worries me even more on my own forecasts.

This confirms that most hedge funds, like any other branch of the asset management sector is much more about marketing and sales than actual money management skills...



[2010-10-21 Update] : It seems like I was right, and that John Taylor is indeed a very good contrarian indicator: