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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: UncleBigs who wrote (62270)	5/30/2006 11:14:35 PM
From: andiron	Respond to of 110194

carry trade has been MAGNIFIED due to derivative play.. Hence even a small change causes significant dislocation. See how the whiz kids of today are messing it up big time and yet get rewarded by obscene compensation...what a load of crap.. ------------------------------- Errors double in derivatives trading By Richard Beales in New York Published: May 30 2006 20:03 \| Last updated: May 30 2006 20:03 Errors in trading complex credit derivatives among Wall Street banks doubled last year, highlighting the operational risks faced by the world's biggest financial institutions in keeping track of the rapidly growing $17,000bn market. One in every five credit derivatives trades made by big dealers initially contained mistakes, according to a survey from the industry's leading lobbying group, the International Swaps and Derivatives Association.

To: UncleBigs who wrote (62270)	5/30/2006 11:27:11 PM
From: booyaka	Read Replies (1) \| Respond to of 110194

even if Japan raises rates to 2%, they will still be the lowest cost currency in the world. I doubt this results in the unwind of the yen carry on its own. I agree. The BOJ plans to proceed slowly with rate hikes. A healthy yield spread should persist between Japan and the US/Europe for quite a while. I also agree that the yen carry trade will unwind nevertheless. I don't know what will trigger it but it will probably be sudden, like in Sept '98 when the Russian debt default triggered a moonshot in the yen.