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Strategies & Market Trends : The Art of Investing -- Ignore unavailable to you. Want to Upgrade?

To: Sun Tzu who wrote (162)	10/9/1998 11:26:00 AM
From: Kushi Kullar	Respond to of 10711

Thanks.

To: Sun Tzu who wrote (162)	10/15/1998 3:01:00 PM
From: Sun Tzu	Respond to of 10711

I've had questions on my lack of follow up on the Yen carry trade. Since others may be interested in this, I'm making the answer public. I was going to write about the danger of falling dollar and rising yen and a forced liquidation of the long bond; It all happened before I got to write it, so I don't see the point in writing it. I don't see the yen carry trade worth the risk rewards for now. I think I briefly hinted on AoI that the recent up spike in yen and the down spike in long bond has meant that more and more hedge funds are now in dire straights. Until that situation unravels, I'd stay clear of that trade. A good trade in my opinion is to buy German and U.K government bond zeros (and perhaps short yen as a counter trade). Like the yen carry trade, the UK interest rate cut came sooner than I thought, but there is still plenty of potential there, esp. since many do not expect large scale EU rate cuts as I do. Also, my sources on Wall St. tell me that the European banks have even greater exposure to emerging markets than both U.S. and Japan. This was incredible news to me, and I assure you that it is incredible to Europeans as well. Which is why Europe is in denial for now. I believe my source (it is very credible) and believe that when the time to pay the piper comes, European bonds will have as big of a rally as U.S bonds have and their banks will fall just as badly as ours here. Sun Tzu P.S. Does anyone know of a charting site for currencies and EU gov't bonds? Perhaps somewhere in Europe there is one?