Greetings Economists, On Mar 2, 2007, at 8:20 AM, Jim Devine wrote:
They often don't reflect what the cappos care about, i.e., the fundamentals.
Doyle; From Bloomberg; The yield advantage of U.S. Treasury 10-year notes over similar-maturity Japanese government debt shrank to 2.83 percentage points, from 2.89 percentage points yesterday. A narrowing gap dims the allure of dollar-denominated assets relative to those in Japan. Doyle; This is dollar volatility, not great but significant enough to keep watching. Also besides the carriage trade, there is a lot of activity in credit derivatives as well especially risk default in corporate debt with the common comment that no one anticipated the volatility. Bad bets especially the most recent entrants into the market. Both dollar gyration movement in currency markets and corporate default are long anticipated risks surrounding the U.S. economy. Is this movement showing that instability is emerging in these areas? Doyle
