- "risk on" trade: bought stocks, sold dollars for other other currencies. "risk off": sell stocks, buy back dollars
- when equities go up, a sign of investors taking on risk, dollar, yen go down
- carry trade high yield currencies: Australian, New Zealand dollar
General news
- since mid-december, euro has fallen
- 2009: broad brush investment theme; 2010: selecting bets more carefully
- American Airlines, Delta competing to partner with JAL (just cut 1/3 of its workforce); could be the largest bankruptcy outside the financial sector
- Possible Paris bond trading exchange in the works; set for next year
- Resurgence in European high yield (~10%, 20% yield at peak) paper; 30-40% growth compared to 15% investment grade
- Platinum: first physical platinum, palladium market
- Swiss Re transferred $300m to Berkshire
- Banks expected to be less profitable as quantitative easing ends, decreasing trading profits and available leverage
- Greek 10-yr +270bps to the Bund
- Will the European union allow the euro to suffer to help Greece, or play hard and allow Greece to suffer?
CDS premium and default probabilities
- Use of a CDS for limit exposure to a government is becoming more popular; new regulations have created the demand
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