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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Henry Volquardsen who wrote (5299)	12/17/2001 9:51:07 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

Hi Henry, I was suspecting that with the wide array of hedging and over the counter derivative transactions and other derivative vehicles meant that the banks would not be inherently short in their futures transactions. The currency spot and forward markets really dwarf the notional value of the Chicago currency futures, from what I've seen. Which major economy has experienced an inverted yield curve for the most time over the past 10 or 15 years would you say? I guess the 1979 to 1981 period was the period in the US where the curve spent the largest percentage of time inverted? It's amazing how the FED Funds started 1978 at 6.87% or so and then ran up in a straight line to 17.5% by early 1980. THEN collapsed to about 9% by the middle of 1980, only to turn around and ramp back up to 19% by Dec of 1980... what kind of Mr. TOAD's wild ride was that -ng- can you imagine trying to run a swaps book or other derivative book with that kind of volatility? I guess the derivative markets were smaller back then. John