Low dollar feeds risky global asset bubble

• European dark pool liquidity has increased 5x since the start of the year; Oct: only 1.2% of total trading
• Reinsurance companies: very few catastrophic events, bond markets have recovered strongly. Munish Re: world biggest reinsurer
• TSE now offering co-location, to match US HFT
• Bank of England debating to continue quantitative easing; action has boosted asset prices but secondary effects in the market are unclear
• New technology has released natural gas locked in shale rock, of which the US has a surplus. LNG producers have sent the excess to Russia, which has produced a surplus there amid the slow economy
• US banks: 'skin the game' legislation: retained unhedged 10% of the credit risk in a securitization. Lack of investor interesting in anything non-prime has made the banks keep 12-15% of a deal
• Risky asset bubble (equities, oil, commodities) driven by falling dollar. Borrowing in dollars (short dollar) alone gets your nearly 20%; total returns for investing those proceeds in risky strategy yields 50-70%. One big common trade: short the dollar to buy any global risky assets
• Central banks in Asia / LatAm are fighting currency appreciation
• Fed is artificially keeping vol low by massive asset purchases - expect to go away soon