monday trading.., page-53

the double whammy for the AUS banks is they issued a boatload of debt in USD last year. if this is correct, they are banking on the USD falling, making debt repayments cheaper. good tactic ...

if the USD recovers, and rapidly (kevin only knows how or why) then the AUS banks stand to lose out, leaning on our indexes with reduced profits.

i think this is how it works ...

there is 2 carry trades with ridiculously low interest. the fact that speculation isn;t even more rampant on 0.015% for 3 months tells you things are getting heavy.

The direction for investment capital flows is (1) from equities, into (2) high yield funds, into (3) (longer/low yield funds, into cash/currency.

Gold might play a part in this, and yields in junk/high yield funds are turning. Long yields are also showing signs of increased demand.

This shows people are looking for safety already. Maybe a short term thing, or maybe part of something larger in a months time.

But conditions are even more ripe for an increase in speculation. There is a reason why they are not borrowing at 0.015% for 3 months.