[lbo-talk] mobilization

Robert Wrubel bobwrubel at yahoo.com
Wed Oct 24 16:24:41 PDT 2007


Doug wrote: "No one - well, almost no one - wants to hold a 30-year asset and just accept regular interest payments! Slow, dull. I haven't seen any recent stats, but the last I saw, probably in the mid-90s, the average holding period for a 30-year U.S. Treasury bond was 30

days."

Interesting! So you bundle a lot of mortgages together and get to call that a tradeable "security", and suddenly it's all sexy. Of course, no one would buy such a crazy thing, not a respectable German bank, at least! Would they?

BobW

--- Doug Henwood <dhenwood at panix.com> wrote:


>
> On Oct 24, 2007, at 9:50 AM, Robert Wrubel wrote:
>
> > Doug quote Schumpeter:
> > ""It is one of the most characteristic features
> of
> > the financial side of capitalist evolution so to
> > 'mobilize' all, even the longest, maturities as to
> > make any committment to a promise of future
> balances
> > amenable to being in turn financed by any sort of
> > funds and especially by funds available for a
> short
> > time, even overnight, only."
> >
> > Could you express this in less technical language,
> > Doug, or as representing a more general tendency?
> Is
> > it comparable to buying options -- betting on
> someone
> > else's bet? Or is it a case of reckless greed --
> the
> > lure of profit competing with a rational
> calculation
> > of risk? The thing described seems self-defeating
> this
> > way -- capitalist financial managers
> second-guessing
> > themselves -- which does not seem part of a "core
> of
> > the capitalist process."
>
> It's about turning up the speed, of making capital
> turn a profit as
> quickly as possible, and maximizing liquidity, so
> you can get out in
> a hurry. No one - well, almost no one - wants to
> hold a 30-year asset
> and just accept regular interest payments! Slow,
> dull. I haven't seen
> any recent stats, but the last I saw, probably in
> the mid-90s, the
> average holding period for a 30-year U.S. Treasury
> bond was 30 days.
>
> Doug
> ___________________________________
>
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>



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