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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: GST who wrote (241482)3/19/2010 1:54:56 AM
From: PerspectiveRead Replies (2) of 306849
 
My impression, and I would be happy to be proven wrong, is that the Clownbuck has become a funding currency for a great deal of carry trades right now. Borrowing at what are effectively negative interest rates, speculators the world over have used the weak dollar to lease all manner of risky assets. And, yes, the Fed could have prevented this by not shoving low rates down our throats. When we get our double-dip, those loans will get called in. The only other change at the margin that I think could offset that is if there were wholesale liquidations of U.S. securities accumulated by foreign central banks in past support of their vendor financing.

`BC
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