As far as this foreign exchange and interest rate speculation goes, my guess is that things have reached a point where forces are in play that no economic theory can quantify or analyze. On 10-1-98, Doug posted a British newspaper story about a "mole" hunt at the Bundesbank. It was a story that I had seen in a British newspaper that Doug was good enough to post. If true, as I mentioned sometime ago to Barkley, it's a question of whose playing and who are they playing for.
Brad De Long wrote:
> >Re yesterday's panicky selloff of the dollar against the yen: I see
> >that Julian Robertson's (reputedly troubled) Tiger Management fund got
> >caught in a squeeze here. Anyone want to hazard a guess as to whether
> >Tiger will be the next hedge fund to, ah, lose its "symmetry"?
> >Carl Remick
> They lost what, 10 to 20% of their capital yesterday?
> I thought that they were still up for the year going into yesterday--and
> that their portfolio was liquid. So I think that Tiger is still in good
> Brad DeLong
> Professor J. Bradford De Long
> Department of Economics, #3880
> University of California at Berkeley
> Berkeley, CA 94720-3880
> (510) 643-4027; (925) 283-2709 voice
> (510) 642-6615; (925) 283-3897 fax