.blackswantrading: CDO Containment? Watch the yen!

Do Treasuries catch a bid on a CDO problem or are they sold as a hedge? We can never get that right. But we could find out soon as two big Bear Stearns Hedge Funds holding CDOs might be going belly up.There no doubt the system has weathered the subprime problem very well so far. But this may be another test. It could generate some urgency on the part of other hedge funds to reduce some of their overall market leverage. And in the currency market, much of that has been created thought tubiquitous carry trade (Japanese yen and Swiss franc being thkey funding currencies).So continue to watch Japanese yen.It seems now to be playing the role as the risk-gauge for the global economy. massive one-way bet in the yen, as you can see in the huge open interest level in the currency futures mare