Mar 12, 2007
written on Mar 8, 2007
If you have any involvement in the equities markets, I’m sure you’ve noticed that things were a bit rough last week and have yet to really settle down. The reason du jour is China. If you read the comments coming out of Washington lately you’ll know that China is responsible for everything from global warming to the common cold. Supposedly they are going to slow their economy down and that will lead to less of everything for everybody. I’m not sure I buy that argument, but it was in all the papers. Right behind China in the blame game, we have what is euphemistically referred to as the “Yen carry trade”. That’s where you borrow money from Japan at very low rates and loan it out at much high rates.