Re: Bond Trading
also, a new avenue is in the CDS market, where the waters are relatively new and you have some hedgers in there as well.
bond trades can be parsed out to default risk via the CDS market nowadays. can you trade that?
i know countrywide's CDS price soared to over 1.1mil per 10mil contract (i.e. spreads of over 1100 bps above treasuries). if you don't think they'll fold then a direct bet there coudl work.
basically i'm a big fan of taking bets as efficiently as possible based on your views. active management 101 imo.
but, your reasoning is sound so long as your facts are correct. especially given that markets tend to be most inefficient at times like these. i'm very happy to be living through and watching this now so i cna test my own thoughts.
and even more so since i've just done preliminary studying on mandelbrot's theories. lol @ "goldman's models telling them this would happen 1 time in every 100 millenia."
GL with that. price changes are fractal not only in scale but in time. we are in a fast time now and have been in a slow time for years.
Barron
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