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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: chic_hearne who wrote (32979)11/1/2000 3:23:33 PM
From: pater tenebrarum  Read Replies (2) of 436258
 
the carry trade works on the simple principle that you borrow money in an area with low rates and a weakening currency (Euro and gold) and invest it in an area with higher rates and an appreciating currency (frizzlebun). the size isn't easily quantifiable, but it is HUGE.
eventually too many people crowd into the same trade as it keeps working...until positioning is so lopsided that it can only unwind with a bang.
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