Two things:

–I’ve been struck by two savvy observers noting that interest rates on government bonds are now around the same place they were in 2005 and early 2006. That’s a time when we were past the internet collapse of 2000, world economies were expanding, China was roaring away, and the massive mortgage loan fraud committed by the major money center banks in the US was only in its early stages–and unrecognized by almost all investors.

Today, China’s a mess and the population of the US and Europe is considerably more gray-haired than back then. So overall economic growth is slower now. The US economy also has to deal with the strength of the US$, which has gained about 30% against the yen and half that against the euro since 2005-6.

So, yes, central banks have turned from being buyers of government bonds to sellers. But maybe where long-term interest rates will settle in is no longer a front-burner issue

–this is just weird. The ARK fund group announced this week that it has, if I understood the Bloomberg clip I listened to correctly, $2 billion in aggregate realized losses inside its fund group, vs. $14 billion or so under management in July, the fiscal year end. These losses are enough, ARK thinks, to offset taxable gains from the sale of securities for the next two or three years.

What an odd thing to say–that perhaps the group’s single largest attraction for a new investor is the extensive losses prior investors have incurred. And if the world were to take this to heart and massive inflows were to come into the funds, existing holders’ share of these losses could be substantially diluted.

The statement also invites at least one other question. Are there also substantial unrealized losses in the fund group–meaning shares trading at below their purchase price but not yet sold? If I’m reading the ARK annual report correctly (marked p. 55, but p. 57 in the index), the answer is that there are–about $16 billion worth. This compares with about $500 million in unrealized gains.

Since there’s a time value to these losses–the sooner used the more they’re worth–is there a plan to trade around existing positions to try to make short-term gains?