Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who wrote (10935)	11/1/2001 3:19:02 PM
From: Gemlaoshi	Read Replies (2) of 74559

Tradermike, It makes sense to drop the 30-year bond ONLY if the Treasury can also eliminate some of its long-term obligations. Matching maturities of assets and offsetting liabilities (or hedging them) is at the root of investment management in the insurance industry. The current slope of the yield curve always entices one to move down the maturity curve. However, as the Savings and Loan industry illustrated so well only a decade ago, it is eventually financial suicide to continue to borrow on the short end of the curve to finance obligations on the long end of the curve!! Dave

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