Paul D. Kim | 136 E. 55th Street | New York, NY 10022 | T. 954-296-4546 E flatpeak@gmail.

com


Macro Cross-Asset 1rad|ng S|mu|at|on
August 1S, 2014 (Ir|day - as of 2:00pm)

S|nce Iune 18
,
2014:
LqulLy/luLures AccounL: +3.07¼
lorex AccounL: +S.14¼

8enchmark: S&Þ 300: -(0.46¼)












Paul D. Kim | 136 E. 55th Street | New York, NY 10022 | T. 954-296-4546 E flatpeak@gmail.com

8/15/14 – Commentary

Much of the premise behind the analysis from last Friday was that Putin’s stance up to this point was essentially
the middle ground (in a nutshell, a step back would erode his domestic support and a step forward would risk
escalation that Russia is ill equipped to handle both militarily and economically. The idea that he would rather
not deviate from this was based on the assumption that Ukraine wouldn’t do anything rash.

The report that Ukraine destroyed parts of a Russian armor column may perhaps be a result of miscalculation on
both sides. For one, in a militarized event, there’s always a faction of ultranationalist/warhawks that tend to
complicate things. The event may be the result of an overzealous commander/officer who overreached. The
Ukrainian government behaving as if it has condoned the action is simply a matter of optics -central government
appearing to be in control of everything. And finally, it’s possible that Putin didn’t expect this to happen either.

I think there’s a higher risk now that Putin may have to deviate from that middle path. Essentially, his hand will
be forced. Even if Putin doesn't plan to follow through with it, he still has to flex his muscle for the Russian
people and, most importantly, placate the ultranationalist faction that seems to be driving the narrative in Russia.

Ultimately, my views remain unchanged that the response that is yet to come from Putin will be nothing but
posturing, and that the market will become numb to this type of saber rattling as well.

But my initial reaction based on that analysis when the S&P500 instantly plummeted 10-points was to
sell positions and hedge by being slightly net short.

I’ve flattened a lot of my long positions in the expectation of the market initially acting negative on
Russia’s formal reaction that is yet to come. But just as buying the market on August 4
th
on the same
premise has worked, I will look to be the buyer of any major weakness next week.

(Changes in positioning have been reflected in bold lettering below)



Paul D. Kim | 136 E. 55th Street | New York, NY 10022 | T. 954-296-4546 E flatpeak@gmail.com



Largest trading positions:

1) Short Euro against U.S. Dollar (reasons outlined in the previous trading update 7/31)

2) Short Euro against Swiss Franc

3) Short Gold (via ETF: GLD and ETF: GDX)

4) Short equities via S&P 500 (ETF: SPY)

5) Short treasuries (via ETF: TLT)

6) Long volatility (via VXX)

7) Long German DAX (via ETF: EWG)










Paul D. Kim | 136 E. 55th Street | New York, NY 10022 | T. 954-296-4546 E flatpeak@gmail.com

8/13/14


Paul D. Kim | 136 E. 55th Street | New York, NY 10022 | T. 954-296-4546 E flatpeak@gmail.com


1rad|ng Account ku|es:
1) SLarLlng AccounL Slze:
a. Cash equlLles/fuLures/opLlon: $10mllllon
b. lorex: $10mllllon

2) lor Lhe cash accounL (non-forex), macro vlews wlll be reflecLed uslng llsLed equlLy L1ls wlLh deep llquldlLy/volume and neL asseLs of $1
bllllon or greaLer ln order Lo besL represenL Lhe odds of Lhe sLraLegy belng scalable.

3) MosL of Lhe speculaLlve poslLlons can also be accuraLely expressed uslng fuLures, buL because Lhe volume ls more consLralned aL
dlfferenL Llmes and because Lhe plaLform falls Lo Lake volume lnLo conslderaLlon (hence Lhe Lrades' lmpacL on Lhe acLual prlce), Lhe use
of fuLures wlll be llmlLed. ÞoslLlons LhaL l deem Lo be my core longer-Lerm would be beLLer expressed vla equlLles. 8uL for commodlLles
such as crude oll, sllver, copper, eLc., Lhey wlll solely be expressed Lhrough Lhe fuLures conLracL markeL due Lo conLango/decay lssues
LhaL mosL commodlLles L1ls suffer.

4) 1he overall goal ls Lo ldenLlfy aLLracLlve opporLunlLles wlLh goals of holdlng Lhe poslLlons for mulLl-week/monLh perlods. lmporLance wlll
always be puL on llquldlLy and rlsk exposure. Also, belng able Lo reallsLlcally llquldaLe all poslLlons by end of Lradlng day or vlce versa,
scale up rlsk, wlll be an advanLage of Lhe sLraLegy.

3) ually updaLes wlll be slmple and shorL, as you'll recelve a Llme-sLamped screenshoL of Lhe accounL summary where deLalled poslLlons
and Þ/L wlll be all wlLhln a slngle lmage.

6) Leverage for spoL currency poslLlon wlll be llmlLed 2.3x Lhe underlylng cash value - wlLh sLrlngenL rlsk managemenL ln mlnd.