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Strategies & Market Trends : Ask DrBob

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To: Louis V. Lambrecht who wrote (58650)	5/3/2002 4:14:18 PM
From: stan_hughes	Read Replies (2) of 100058

Louis - Yes, the hairs are literally sprouting from your nostrils and your claws need clipping again. True story about the interest rate game. One arm of the bank says you can't have any more credit due to excessive market risk, but another arm will gladly faciliate the movement of your debt into the short end with the lure of appearing to lower your interest costs. Many a corporate treasurer will get snared in that one when short rates start to move up in the next liquidity crunch and they find themselves suddenly shut out of the long end. Mismatching asset and liability maturities is a leading cause of financial suicide, just ask any one of a number of bankrupt bankers.

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