ehm... not really if you borrow a fix interest rate it will be high for the current market time. If you are doing the opposite you are actually increasing the risk that you want to hedge
No, he's right; Shorting a treasury bond is equivalent to borrowing at the treasury's yield; The fact that you shouldn't be able to borrow at the gov't risk premium is accounted for by the haircut on the bond and the repo rate.
Quote from Nym:
ehm... not really if you borrow a fix interest rate it will be high for the current market time. If you are doing the opposite you are actually increasing the risk that you want to hedge
Actually you have a point. Unfortunately many of us can short bonds with IB or similar, but maybe we can do something with the future. However, i am not exactly comfortable with bonds future...
