Goldman Sachs wants you to know that while one of their yen trades is dying, another one is thriving. This is called diversification. It's also called hedging your press releases.
The bank says intervention effects on the Japanese yen are fading. Fading like your account balance after you read their last research note. But don't worry. The relative value carry strategies should continue to thrive. Those words mean something to someone somewhere, and that person is not you.
Here's what happened. Goldman told clients to bet on the yen one way. Then the yen went the other way. Then the Japanese government stepped in. Then that stopped working. Then Goldman said actually we meant this other yen trade the whole time. The one that's thriving. Pay no attention to the fade behind the curtain.
Retail traders read this headline and thought they finally cracked the code. They Googled "relative value carry strategies" at 11 PM on a Tuesday. They found a Reddit thread from 2019. They opened a position Wednesday morning. Goldman's desk took the other side Wednesday afternoon.
The beautiful part is Goldman gets paid either way. Trade works, they're geniuses. Trade fails, well intervention effects faded and also did you see our other call that printed? The one we mentioned in paragraph seven of a twelve-page note you didn't finish reading because you were too busy calculating your Lambo payment.
One yen trade thriving while another fades sounds like a fortune cookie written by a risk management committee. It means nothing. It promises everything. It protects Goldman completely.
Somewhere in Tokyo, a currency trader just shorted the yen based on a headline he read while taking a sh*t, and Goldman Sachs just bought his house.
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