The carry trade — almost wordless

November 28, 2011

The idea

Borrow in a currency with low interest rates, lend in a currency with high interest rates.

The image

Photo by Patti via stock.xchng

The question

Am I wrong?

Subscribe to the Portfolio Probe blog by Email

Latest posts

Leave a Reply

  1. Steven 2011-11-28 at 16:29 - Reply

    Except most of the time you get the cheese. The carry trade has been remarkably fruitful, even considering the periodic crashes.

    http://www.nber.org/chapters/c7288.pdf

    • Pat 2011-11-28 at 16:51 - Reply

      Steven,

      Thanks for adding the reference.

Related posts

  • Efficient Atmospheres Hypothesis

    September 9, 2011

    Mark Buchanan in The Physics of Finance has another great post called "Of hurricanes and economic equilibrium". The Efficient Market Hypothesis has been beaten up quite a lot lately, [...]

  • Quantum thinking

    September 6, 2011

    Human logic is more like quantum logic than formal logic. The Physics of Finance in "Quantum thinking" points to an article in New Scientist (actually the cover piece) about [...]

  • Schelling points and prices

    September 4, 2011

    Deus Ex Macchiato has a brief post called "Prices as modified Schelling Points".  It is a cute little idea about how markets work. I had known of the concept [...]