Bond Outlook [by bridport & cie, September 5th 2007]
The concept of the monster’s two heads (housing and credit squeeze) and a tail (carry trade) reminds us that concentrating on just one head, currently the credit squeeze, can easily allow the other head to sneak up and strike. However, let us begin with the credit squeeze head, return to the housing head and, for this week at least, not worry about the tail. |
Libor being significantly above central bank target rates is the sure sign of banks’ reluctance to lend to each other. |
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