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Strategies & Market Trends : Treasury Bond Futures Trading -- Ignore unavailable to you. Want to Upgrade?

To: Patsy Collins who wrote (240)	6/17/1999 9:18:00 AM
From: Michael Friesen	Read Replies (1) \| Respond to of 288

Thanks Patsy! I was wondering when an answer would come... I was beginning to think that everybody took this thread off their lists.

To: Patsy Collins who wrote (240)	6/17/1999 10:35:00 AM
From: Daniel Chisholm	Read Replies (1) \| Respond to of 288

MOB is ... really a tax play... Something I've always wondered about: since the market consists of both tax-exempt and tax-paying participants, what sort of natural tax arbitrage takes place? e.g., if I were running a U.S. tax-exempt investment fund (a pension plan?), could I short $X worth of munis and invest the proceeds in $X worth of similar term treasuries? Basically a tax-related carry trade? What about offshore entities (e.g., real hedge funds)? Is it possible (I'm not a tax law expert) for them to something like this? The fact that a MOB spread exists and persists would suggest to me that this arbitrage is somehow prevented, I just don't know how. - Daniel