4/23/06 - notes from AAII subgroup mtg 4/1/06

- www.fidelity.com/runningbulls

- fed funds futures (can be found in barrons)
- smart money thinks probability of interest rate change
- example
- today is 8/3; fed mtg is 8/22
- today = 6.5%; probability of 6.75%?
- today, fed funds futures = 93.49 = 6.51%

- 22/31 * 6.5 + 9/31 * (6.75p + 6.5(1-p)) = 6.51
- therefore, p = 13.64%

- FT dxy-z = $ exchange rate
- vmfxx leads fed funds by a bit ($FEDD)
- pot'l US vs Int'l System based on USD
- junk - 10 yr bond; if spread <> 5%, get into junk