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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 368.29+0.6%Nov 7 4:00 PM EST
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To: elmatador who wrote (51671)6/23/2009 3:52:45 PM
From: Haim R. Branisteanu  Read Replies (2) of 217574
 
Elamat - today was again a classic "interest capture" day in bond and FX market.

Any one buying US treasuries trashed the USD it went from 1.3825 during the night to above 1.41 at the auction.

Nominal yield increased by close to 2% meaning that any one from EUR land or the US with a EUR/USD hedge, bought 2 year treasuries not for 1.25% but for 3.25%

Net Net the speculation in the FX market gave the institutional buyer a 260% higher yield - in fix income world this is HUGE difference because you should add a 1 to 10 leverage MINIMUM to cash at .228% overnight LIBOR

EUR/USD forwards have almost no discounts at 1 year maturity

All in all the spread is 3% instead of 1% and the locked returns at 1 to 10 leverage is 30% instead of 10% - so who needs to dabble in stock or junk bonds - just jig the FX market and there you are.

That is why I mentioned in one of my earlier post that WS banks and their minions must be utterly destroyed otherwise no financial stability will ensure

I bet you the BO administration is tacit or even encourages such behaviour at the expense of international trade and the world population to enrich the few
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