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Hello M.,
Friday, December 21, 2001, 8:21:33 PM, you wrote:
MS> Bond market is "spooked" by several factors of significance:
MS> 1) record levels of liquidity as measure by M3 money supply growth; recent
MS> readings are in never-seen-before land. The implication is that this will
MS> spark the economy that will eventually and inevitably cause a rise in the
MS> demand for money.
MS> 2) continued strength in the real estate and home building sectors of the
MS> economy...again, an anomoly that has not occurred in past recessions. This
MS> implies a strong DEMAND for longer-term money.
MS> 3) potential government deficits caused by the yet-to-be-calculated cost of
MS> the US war against terrorism. Implication is future government financing in
MS> the way of additional DEMAND for longer term money to fund a long term war.
MS> This causes a "crowding-out" effect with the private sector.
MS> 4) the negative effect on the federal budget deficit of new impending "a
MS> little bit of pork" legislation to relieve unemployment and to jump-start
MS> the economy. Again, more demand is implied.
MS> *any* of these are bad news for bonds.
MS> Together, they spell disaster.
>> -----Original Message-----
>> From: nmsmith@xxxxxxxxx [mailto:nmsmith@xxxxxxxxx]
>> Sent: Friday, December 21, 2001 5:52 PM
>> To: omega-list@xxxxxxxxxx
>> Subject: Off topic Bonds direction
>>
>>
>> Would anyone care to share an opinion on what is happening with 10 and
>> 30 yr. bonds at the moment.
>> They seem to be in a bit of congestion and today Friday they closed
>> near their lows.
>> I was wondering if the low closing before the weekend
>> has some significance, or if I missed some news.
>>
>> Thanks
>> NS
>>
Thanks for your reply,
The more I learn about bonds the more complicated they get.
NS
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