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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (66891)	10/20/2003 1:19:52 PM
From: Real Man	Read Replies (1) \| Respond to of 94695

Yep, Yen going up sharply may send interest rates higher as bonds tank. Basically, the Japanese CB is actively buying US treasuries - basically, all new issued paper - i.e., the US budget deficit is fully supported by the Japanese central bank. Yen rushing up will send a signal they no longer do so, or there is a powerful hand buying Yen. Higher rates will kill the mini-bull in stocks.

To: William H Huebl who wrote (66891)	10/20/2003 1:58:59 PM
From: Real Man	Read Replies (1) \| Respond to of 94695

One of the major derivative plays in the 90-s was the Yen carry trade - you borrow Yen at 1%, and invest the proceeds in US interest bearing securities. The same was done with gold, with lease rates below 1%. The size of gold carry trade is roughly known, since official estimates of all leased out gold from CB vaults around the world give 5,000 tonnes. Unofficial, more real estimates produce a figure of 15,000 tonnes, roughly 1/2 of all CB gold. That's physical gold, which was sold and consumed, and is now owed to Central banks. So? Are these banking guys feeling a little trapped right now or what? I somehow feel that this 4.62% yield level on the 10-year bond will be defended at all costs. These costs include crashing the stock market, if needed.