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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (1355)	3/5/2004 6:06:58 PM
From: KyrosL	Respond to of 116555

I agree with you a sudden increase is preposterous. But signaling it's coming and doing it over a year or so is not. Companies that use swaps to lower their LT debt rates are investment grade and should be OK -- especially with long rates coming down. Variable rate mortgages at 3.5% get swapped with 30 years at 4% (if long rates come down to 3%, as I expect). Derivatives get unwound, if the increase is done over a year. And that's good for the long term health of the economy.