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Strategies & Market Trends : BAK - Investing
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To: batman10023 who wrote (2881)6/6/2012 10:42:27 AM
From: DoggyDogWorld1 Recommendation  Read Replies (2) of 3249
 
Re: Treasuries (was Two Buck Chuck...)

very few financial firms borrow short and lend long of course... sarcasm..
OK, wise guy, you got me :) I wasn't thinking of commercial banks, whose raison d'etre is to borrow short and lend long. The Fed has their back.Though if rates stay this low long enough before moving up the negative spread alone will eat them. That's why I said earlier the Fed's best move right now might be pushing long term rates higher.

I was really thinking of non-banks. Insurers, MREITs, hedge funds, prop trading desks, etc. These guys should match durations in this environment (and not through swaps or other hedges, which only hide risk) . That would reduce earnings, though, so more and more are rolling the dice. When it comes up snake eyes we'll all lose.
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