6 replies to this topic

[.Blizzard]

[selecto]

Seems like a lot of "carry" has been wiped out in the past few days. When one has borrowed Yen to buy stuff in Dollars, and the Yen moves against you, then you have tio start selling the stuff you bought, in an attempt not to violate Buffett's Rules 1 & 2. At least, that's how I understand it. What I don';t understand is why Yen owners can only get .5% on their money.

[flyers&divers]

Selecto, The yen borrowed has been invested in other vehicles in higher paying countries in cash, bonds, stocks, physical commodities, real estate. etc. to the tune of tens if not hundreds of billions of $. This will take time to unravel. Regards, F&D

Edited by flyers&divers, 02 March 2007 - 04:24 PM.

[selecto]

Yes, I underrstand that. But I don't understand how/why the Yen owners can only get .5% on their money, even with 0 inflation there.

Edited by selecto, 02 March 2007 - 04:38 PM.

[spoo tooth]

selecto....It is for the Japan banks. After 1989 the banks were in minus worth. They have replenished themselves over the years by paying chump interest and then creating fiat to invest in high paying paper like New Zealand, U.S. etc.

[Stickan]

Check this out.
The distant yencontract broke 50% retracement and down channel. So it's not in the cards yet. The massacre is still to come....

Meaning of yen carrytrade. Interestingly the article is from Feb 22, 2006

http://www.financial.../2006/0222.html

[no_mind]

The brand new ETF for the Yen might just be perfect timing.
http://stockcharts.c...3816&r=6532.png