Long USD Short GBP, EUR, flat on equities

Closed out most of my longs today and went long the USD on expectations of renewed risk aversion.

The equity market is within a rising wedge formation and momentum is quickly dissipating. Rising wedges tend to break violently and the breaking bias looks to be towards the downside in the short term.

I expect crude to weaken on the short term equity market drop and dollar strength as well as a small VIX bounce.

Correcting misconceptions

Someone commented

"

http://www.autoblog.com/2009/08/11/chevy-volt-gets-230-mpg-but-how/

Summary: unrealistic for overall driving, but very possible in a city-only environment (which is what the 230 mpg rating was, anyway)"

Using that methodology my electric razor gets infinite miles per gallon

Let's learn about efficiency, work, energy, and cars. This diagram should help clarify things: http://www.fueleconomy.gov/FEG/atv.shtml

The engine loss is thermodynamic, you are limited by carnot efficiency. Gasoline combustion engines (i.e. regular cars) are 30% efficient, the average fleet power plant (i.e. the kind that would ultimately power plug in hybrids) is 30-35% efficient. You can't exceed carnot efficiency, it is a theoretical MAXIMUM efficiency. So the 65-70% loss is there to stay. Period. Doesn't matter if you use lithium ion batteries to store electric energy or gasoline to store the chemical energy you have that loss due to thermodynamics.

Hybrids have higher MPG than regular cars because they can recover energy that would be normally lost from braking and idling. It's not because of the magical lithium ion battery or electric motor being more 'efficient.' It's because that energy is no longer being dissipated as useless heat without being harnessed to do work, because it can be STORED thanks to the battery.

So instead of putting in 100 units of chemical energy and only getting 15 units of work with 65-70 units of conversion losses and 15 units of braking and idling losses you have 25 units of work, 65-70 units of conversion losses, and 5 units of braking and idling loss. Voila, your 40 MPG honda civic now gets 60 MPG.

The only way to improve on that number is to have a more efficient engine. That means higher operating temperatures, which aren't really feasible in an internal combustion engine in a car. Hence an electric car would allow for higher efficiencies through 'economies of scale' really just very efficient large scale power plants (50%-60% efficient). Even then youre MPG would be ~120 MPG. There is no goddamn way you could get 230 MPG unless your car accelerated slower than molasses and had 30" rims that were 2" wide running on slick tires.

230 MPG + My Arse

Sorry, unless the Chevy Volt is using racing slicks as its tires or GM plans on buying 60% efficient combined cycle plants to generate all the power for the vehicle there is no way it will get 230 MPG. More like 1/2 that. At most.