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Pastimes : Ask Mohan about the Market

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To: Defrocked who wrote (11951)	12/20/1997 6:44:00 PM
From: Jack Clarke	Read Replies (1) of 18056

Defrocked: That's fascinating info. I have not kept up with the precise data, but your post lays it out plainly! I have always wondered why someone would put his money at risk for 30 years for a miniscule gain in yield compared with the shorter maturities. Perhaps that's what the long-time bearish Jim Grant means by "groping for yield." His latest issue came today (Grant's Interest Rate Observer, 30 Wall St., NY 10005), and in it he tries to characterize the current monetary stucture. He feels that devaluation of Asian currencies, and their need to repay dollar-denominated debt guarantees some future reaction against the dollar. They have already stopped buying our debt (Barron's MW p. 105), and their holdings are down -11Bn last week as compared to +3Bn a year ago.) Our net overseas interest payments continue to grow, as foreigners' willingness to fund this debt decreases. As Grant says, "...one day they will own more dollars than they ever meant to buy." What's it all mean? Beats me. All I know is my DEC puts expired worthless, but I have some Jan's. Hope springs eternal. Jack

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