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: Real Man who wrote (2324)	11/18/2003 2:23:33 PM
From: Wyätt Gwyön	Read Replies (1) of 110194

the yen carry trade was a lot more popular than gold carry trade. Yet another reason for the big dump of treasuries no. first of all, the Yen Carry Trade was ended by Greenspan when he lowered the policy rate 13 times. why would somebody short 0% yen to buy 0% dollars? that's not a carry trade; it's pure speculation. secondly, Treasurys are HIGHER today. now it's the Dollar Carry Trade, where traders borrow USD to buy, e.g., short end of AUD curve. a carry trade requires a yield differential. that's what pays the cost of "carrying" the short leg of the trade. there is currently almost no carry differential between JPY and USD short ends, hence no reason for carry trade, as i see it.

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