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The Fed Is Burning Money | Harley Bassman
Forward Guidance
How to Manage Convexity and Option Risk
There's three possible risks. One is duration risk, that's when will i get my money back? I usually have a steep curve because you know what's happening in two years but don't know in 30 years. The steeper the curve, that means the more concerned we are about risking the future and we demand a higher premium. Second risk is credit. Credit has not really gone up as much as one might expect. Relates a you put chart of the move versus credit, it looks at the moves leading and and credit lagging. But the vices liked even more on a relative basis, that's what's going on over there with the those three things.
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