“How can I beat the Lehman Aggregate?” a bond manager friend recently asked me. Tough question in this environment; I’m still musing about it. It’s a tough market. Start with Treasuries...
Read MoreInsect bites, bruises, sore feet, tiredness, happy sons… I am back from backpacking. Whenever a financial product is plentiful, it is usually time to avoid it. Tonight’s poster child for such nuttiness is junk...
Read MoreThe last few days, I’ve been reading various opinions on the US Economy on the web, and thinking that they don’t really get the situation that we are in, both short- and long-term. I am increasingly...
Read MoreJune 2010 August 2010 Comments Information received since the Federal Open Market Committee met in April suggests that the economic recovery is proceeding and that the labor market is improving gradually. Information received...
Read MoreThe world’s largest hedge fund, the Federal Reserve, is trying to decide whether it should expand its operations. Unlike most hedge funds, the Federal Reserve has a big advantage in that it can fund itself cheaply,...
Read MoreTonight I pick up on the odds and ends. Going along with last night’s theme of making mistakes, we had a saying in our office, “Great minds think alike. Fools seldom differ.” It helped us stay...
Read MoreI appreciate my readers. That doesn’t mean that I am the fastest to respond to e-mails, but I appreciate what they write, even when I don’t agree. But here is an e-mail very relevant to tonight’s...
Read More“We’re doing a CDO.” So said the head of investments. A few days later, the staff of an investment bank crashed the branch office where I worked, and told us what they would like us to do. We...
Read MoreYou aren’t supposed to act like a market-maker as a bond manager. That is the role of a broker-dealer, and should they know that you aspire to making the risk-free profits that they do, they may use their power to...
Read More“Price discovery is the toughest part of managing bonds,” one of my brokers told me early on. Right he was. There may be 7000 or so stacks that trade with some regularity in the US, but there might be one...
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