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To: nihil who wrote (72477)	10/16/1998 6:32:00 PM
From: Aaron Cooperband	Respond to of 176387

Nihil - Re: covered interest arbitrage Have you ever tried to do this? I suspect the problem in actually putting on the trade is that you must borrow Yen to do it. Banks normally make these loans in Japan time. This would make your use of CME closing quotes irrelevant, as you must execute the hedge in the Japan time zone. Re: " the unhedged trade as sought in the article I was commenting on is usually more profitable, but unfortunately, every once and a while it goes against you" Agreed. It is obvious that the hedge funds were putting on Yen carry trades that were far from purely hedged arbitrage. Aaron