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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: goldsnow who wrote (36958)	7/10/1999 4:39:00 PM
From: banco$	Respond to of 116786

The Wall Street Journal discussed the "yen carry" trade in its Credit Markets page C16, Monday, June 14, 1999: "Treasury Prices Fall as Hedge Funds Seek to Unwind 'Yen Carry' Trades" ..."Hedge funds, private investment pools for wealthy individuals and institutions, have been a concern for investors since difficulties at Long-Term Capital Management LP in September nearly crippled the capital markets. In recent days, many hedge funds have been hurt by a speculative investment called the "yen carry" trade. Such a strategy entails borrowing Japanese yen and investing the proceeds in U.S. Treasurys. The maneuver has been quite profitable because Japanese interest rates have been low, while yields on U.S. Treasurys much higher. But the yen has rallied in recent days, thanks in large part to a stronger-than-expected report on the Japanese economy released Thursday. This makes it more expensive for investors to repay their borrowed yen. Meanwhile, U.S. Treasurys have continued to slump, also hurting these speculative investors..." Is the WSJ warming up for the unwinding of "gold carry" trades? I have not seen any large publisher raise the issue to date, though it does make for good press when questionable practices like carry trades backfire. It seems irresponsible to omit discussion of the yen carry's sister trade, the gold carry, since the Journal saw fit to mention that 'yen carry' trades pose a problem (risk) to investors.