I don't think the whole Yen carry trade will go away, but maybe certain lenders want their money back, since -
1) they now see better opportunities to lend/invest the money in Japan or other places at MUCH better interest rates. I'm not sure how true this is, but real estate may be red hot.
2) They are a bit worried about the US Dollar and all the other paper currencies, which they know are the usual assets of their borrowers. So they would like to use some funds to buy gold so their bank doesn't blow up if the USD drops and their carry trade friends can only hand back 50% of the loan value.
Maybe they heard that everyone in Hong Kong is buying gold...
3) After the Amaranth blow up, and others, the Japanese lenders have realized that the guys they are loaning Yen to are NOT like Jim Rogers, George Soros, Julian Robertson, T Boone Pickens, etc. but more like Joe Schmoo, Jack Clueless, somebody's brother-in-law, and somebody who used to work at FEMA.
If I was even on the same floor of the building as they guys responsible for those loans, I would wake up screaming.
Nick Leeson, the trader who broke Barring's bank, is scarier than Dracula.
4) They are worried GW Bush might do something stupid. |
