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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: russwinter who wrote (3243)	12/11/2003 8:15:02 PM
From: Wyätt Gwyön	Read Replies (2) of 110194

In fact it's getting to be a free for all i was just thinking this today. as you know, many NPV discounting models for equities rely on the Fed Policy Rate, so a low Policy Rate can be used to justify ever higher equity prices (according to the models and the bubbleheads who espouse them). and likewise, it seems this is being used to justify ever higher prices in all and sundry anti-USD carry trades. with AUD policy at 5.5% or whatever, they have a big premium to the carry...NZD has a big premium...gold has no yield but the carry is so cheap... notice that in each case, the focus is not the "fundamental value" of AUD/NZD/bullion/whatever, but rather the low opportunity cost of relinquishing USD. i hate it when things get away from fundamental value. it seems each time i try to have some fundamental theme impetus for my investment direction, the theme gets coopted by Leveraged Speculators and things get out of hand. where's a body gotta go these days to get away from confetti makers AND speculators? so this gives me cause for concern--could anti-USD just become another bubble?

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