Posted 2/6/2012 4:38 am
Why would someone want to invest in bonds when when the risk is so high that interest rates will go up at some point in the future? I mean, with the Federal Reserve Rate current at zero, I don't see how it could possibly go any lower.
Well, there are lots of reasons. For example, you might be putting together a reverse floater or a butterfly-spread position, and you need some bonds to hedge with. Or you might want to shore up your three-gamma ratio, for example. Maybe its part of a Wedgeman's Put strategy, in which losing bonds are actively sought. Perhaps you will slice them in tranches and sell them to a greater fool. Who knows?
The number one rule in finance is: the house makes money from getting clients to shuffle their money around, regardless of whether the client wins or loses. "Churn em and burn em," baby!
The Bank of Japan has been calling the shots since the so-called "big bang" (yeah right) financial reforms in the late 90s. They follow a typical central bank playbook.
Posted 2/6/2012 5:58 am
I'll bite. How does the average asshole investor with a decent amount of money actually make a return in the market? This is someone without a trader's knowledge or access to the best data.
Index funds? No load mutual funds? Seriously, I don't believe my sorry ass with an online account can compete with JP Morgan's trading software.
Posted 2/6/2012 6:00 am
Do you have grounds to sue or claim damages? Wait until they're old, document signs of distressed decision making and dementia and forcibly assume power of attorney. If you have siblings, try to ensure that the will grants them enough that they won't fuck with you.
People like me make money off of the ignorance of people like you. Sorry, it's just the way things are done. There really is nothing you can do about it; the game is rigged so that you will be slowly stripped of net worth over they years: As much as possible without doing it suddenly or disruptively enough to make you realize it is happeneing, and to allow you to preserve some wealth.
