On Sat, Nov 27, 2010 at 11:24 AM, Doug Henwood <dhenwood at panix.com> wrote:
>
> On Nov 27, 2010, at 2:16 PM, michael perelman wrote:
>
>> Jane D'Arista would add that to the extent that QE2 lowers interest
>> rates on long-term bonds (one of the intended goals of the program –
>> one which will probably not succeed), the program will only serve to
>> make speculation more attractive.
>
> How's that? Speculators generally borrow short-term. A leveraged position in long bonds would be profitable if that happens, but probably most of the movement in rates has happened already, if at all.
>
> Doug
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-- Michael Perelman Economics Department California State University Chico, CA 95929
530 898 5321 fax 530 898 5901 http://michaelperelman.wordpress.com