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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (100382)	4/21/2004 8:53:26 AM
From: geewiz	Read Replies (1) of 132070

Good morning Bond Bears biz.yahoo.com To see thousands of traders at their most jittery, look no further than the $8 trillion bond market. They're all dreading the first Friday of May, when the government is set to issue its next jobs report. But today's bond market is anything but normal. It functions on a hair-trigger of speculation about just how soon the Federal Reserve will begin raising overnight interest rates. The market sold off sharply, too, the morning of Apr. 14, when the government announced a much bigger than expected 0.5% jump in consumer prices. Anxiety is so intense because the market is more leveraged and more hooked on cheap Fed financing than it has been in at least a decade. Traders fear the end of a profitable ploy known as the "carry trade," in which hedge funds, banks, and Wall Street dealers borrow money at dirt-cheap overnight rates and buy 5- and 10-year notes, which yield two to four times what they are paying for their borrowing. May massacre?? later, art

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