Asia Forum Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Asia Forum

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: Joseph Beltran who wrote (6286)	9/9/1998 11:09:00 AM
From: Robert Douglas	Read Replies (1) of 9980

Free money almost! Just borrow money from BOJ and invest it in u.s. treasuries/bonds at virtually no risk. Virtually no risk? Hardly. What about currency risk? Say you borrow on thin margin and the yen rises just 10%, you are either wiped out or incur large losses. So what is the cost to hedge away this currency risk? Well look at the futures markets. The distant yen contracts are selling at premiums to cash at the annual rate of, you got it, 5.1%. Add this to the quarter point you will pay to the Japanese bank and, surprise, surprise, you get pretty close to the rate on that U.S. Treasury. Ain't markets wonderful? Didn't a wise man once say that there was no such thing as a free lunch? I guess that applies to yen-denominated lunches too. -Robert

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next