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No, forget the whole re-investment stuff for now. Just think about what bond cashflows look like and what higher coupons mean etc. Draw a simple diagram, do a few simple calculations in Excel and you will see the light.

I disagree...

Erm, it was intervention, innit?

I don't know, m22, to be honest... IMHO, Hilsenrath's story doesn't change much. Moreover, I don't think it's a matter of unemployment/stock mkt. The very first test is to determine whether the current situation is a "soft patch" and we're in for a bounce in Q3 or whether this is for real...

Here you go again, tj... And here I thought you got mellow and relaxed.

Maybe... The point that all the dissenters are making is that it's ineffective in achieving whatever the goals it sets out to achieve.

Damn funny, that.

Part of job description, I'm afraid, achilles... And yes, sure, things are fluid and minds might change, but it's quite interesting that the objections that are put forth by the hawks are of the right sort. Specifically, they are pointing out that the cost/benefit analysis of QE suggests that...

Among the current voters it's pretty clearly Fisher, Plosser and Kocherlakota. There's obviously others among the non-voters, e.g. Hoenig, Lacker, Lockhart and maybe Bullard. Generally, it's pretty clearly divided along the "saltwater" coastal doves vs the "freshwater" inland hawks...

The owner of the reserve currency has to run a current account deficit, by definition. That means that the reserve ccy status exists to be "abused" (not sure that's the word I'd use).

+1 There's also too much opposition to QE within the FOMC.

You need to get an intuitive sense of what "bond duration" is... Draw a rough diagram of bond cashflows (including the redemption) and try to think about duration as a sort of "center of gravity" of the resulting jaggedy structure. Then imagine what happens if the bond has a higher coupon...

They don't exist...

Yeah, but this is not fiscal xfers, Daal. This is peanuts that Germany can afford without a blink and we're already seeing oppostion from pretty much every quarter (see Roesler, Schaeuble and letter from BuBa's Jens Weidmann). The Germans, both the electorate and the politicians, just don't...

That's part of the problem... The size of the EFSF cannot be so large that it leads to the mkt pushing France into the "bad pack". So at the moment EFSF achieves its AAA rating by the good sovereigns "over-guaranteeing" the amount available to lend (in a couple of diffferent ways, but the...

I am getting so absolutely sodomized by CHF, it's not even funny any more.

GC dragging it up, Daal... Should come back down, hopefully, with this ceiling thing out of the way. Or might be that peeps will have to wait for the downgrade, but, at any rate, should be temporary.

And the Aussie housing mkt is a beaut, innit? I know there's been a lot of discussions of it everywhere, but, surely, if there's anything that just screams "top of the bubble", it's this right here: https://www.investorville.com.au/

I'll be back a bit later to discuss, gents...

Yeah, they would definitely help with the theory, but keep in mind that they're older classics. For factors that generally influence the shapes of these curves, definitely do read Ilmanen's papers, as they're, by far, the best introduction to these subjects. In terms of the LIBOR term basis...