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Strategies & Market Trends : Strictly: Drilling II

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To: nspolar who wrote (10709)4/14/2002 10:57:48 PM
From: t4texas  Read Replies (1) of 36161
 
short term rates, courtesy of the fed, will experience upticks a plenty if/when the us dollar declines. in theory the companies will move fast to reverse swap the short term for the long term debt. since so many companies are doing it and would need to reverse swap quickly, the law of unintended consequences will surely be invoked. i think of these swaps like adjustable rate mortgages, i.e., take some risk for a lower rate knowing that one can get fixed long term rates in various ways if pain starts to set in.
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