The Epic American Credit and Bond Bubble Laboratory Message Board

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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: ild who wrote (9956)	3/11/2004 12:09:20 PM
From: geewiz	of 110194

To all, Caroline Baum had a very insightful column (insightful for the business press anyway) yesterday. Dead Man's Trade No doubt some investors, predisposed to Armageddon over the horizon, are buying Treasuries on the assumption that the lack of job growth means the economy will roll over in coming months. However, ``the dominant influence is the carry trade,'' which involves some variation of borrowing short and lending long, Bond says. ``There's an army of people positioned in strange conditional structures'' using options. ``The hedging (by the option sellers) is so large, it's a case of the tail wagging the dog.'' To the extent that interest rates are divorced from economic reality, ``you now can truly say the bond market is a bubble,'' Bond says. bloomberg.com later, art

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