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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: yard_man who wrote (7666)6/9/2004 8:54:34 AM
From: Knighty Tin  Read Replies (6) of 116555
 
tip, Big insurance cos., large corporations (GE is a major player), and perhaps the super rich individuals, though I'm not sure on that one. And the average Joe can play the game through closed end funds. The best rate is obviously the rate at which banks borrow from the Fed, 1%.

Closed end funds are borrowing at 1% or slightly more in their weekly preferred auctions. They use the proceeds to buy longer term bonds and are taking that arbitrage for the benefit of their shareholders. Supposedly. However, they also charge managment fees on the borrowed amount, so the shareholder is getting stuck for more than 1%.
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