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DanS
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Kickball Capital of the World
Jan 1970
time: 00:15
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Does anybody have comparitive figures for the % of GDP that exports comprise: US, EU, Japan, China, and India? By my quick calculation, the number is about 10% for the US ($80B x 12 / $1T x 100%).
Thanks.
Last edited by DanS on 20-11-2001 at 22:50
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Sten Sture
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SF, CA don't call it frisco... Striker!!
Mar 1999
time: 21:15
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I am actually out of town - at the farm in Allahbama.
Curious that you mention Enron colon... I got to spend a bit of time on that mess over the past few weeks. We had sold it a couple of times over the past year, but left a little on the table because cash was running so high in the portfolio; we ended up selling pretty quickly and getting out well above where it is now. Rule #7: if it is really confusing, don't buy it.
GSE hedges are a really complex thing because of their extreme size, but fairly generic individually. Effectively this is what happens: The GSEs act like a bank wholesaler when they make a mortgage loan. The bank makes an 80% loan to value loan then sells the loan to the GSE, the GSE then sells it in the open market. They buy it from the bank cheaper than they sell it in the market. Some loans they keep. To get the funds to loan out (or buy) they sell debt that theoretically matches the cash flows of the loan. Mortgage loans can pre-pay, so a lot of the GSE borrowing is done with call provisions in the bonds, so if interest rates go down and refi's come in to pay off the home loans, the GSEs can call their bonds in so they aren't left with an asset vs liability mismatch. The real risk that Roland refers to is if the 80% loan to value is insufficient to collateralize the loans and the payees become unable to pay. This happens all of the time, but if it happened simultaneously on a massive scale there would be problems. That would be a depression type scenario for the US economy with 20+% unemployment and massive corporate failures. Theoretically we would be having even bigger problems than a liquidity squeeze at the GSEs.
2yr Treasuries have backed up from their lows, but are still pretty expensive - if the next Fed move is a tightening in response to rapid growth in the domestic economy... 
Corporate bonds have outperformed recently (last two weeks) - their spreads to Treasuries have a tendency to decline when things are more hopeful. Treasuries yields are up + corp yields are up less = corps outperform.
I have got to get back to the DSL line at home and the T1 at the office. This 28.8 is killin' me.
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Colon
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Antwerp, Colon's Chocolate Canard Country
Jan 1970
time: 06:15
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But will the holding-household accept that it will have to let go chunks of the 100% stake someday? It would be the advisable thing to do in order to secure the daughter’s development though.
Last edited by Colon on 21-11-2001 at 19:32
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19-11-2001 17:54
Ohhh yew guys!
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