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[RT] Re: Reality



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Maybe indeed, we need a last nice capitulation on bonds. Such a move could wash
us out towards below 8800.
However a move above 9210-15 definitely looks like a trip towards 9600-9700 to
me.
No positions there for the moment.

Gwenn



mknapp@xxxxxxxxxxxxxx wrote:

> Couldn't agree more.  I do feel, though,  that bonds want to punish the Fed
> a little more before a real rally starts.  Doesn't really look like it
> today, but we have a few Greenspan speeches and ECI this week yet.
>
> > -----Original Message-----
> > From: Gwenael Gautier [mailto:ggautier@xxxxxxxxxxx]
> > Sent: Wednesday, January 26, 2000 2:13 AM
> > To: Michael_Knapp/DRW@xxxxxxxxxxxxxx
> > Cc: List RT
> > Subject: Re: [RT] Reality
> >
> >
> >
> >
> > Reality is indeed what we make it. Now, I am not sure yet how to
> > apply that
> > in
> > the everyday markets: Is it that being so afraid of overvaluation it is
> > already
> > discounted, or will it become so? Is that there may be inflation
> > (which has
> > been
> > the case for 4 years already) is already discounted or will it become so?
> >
> > I tend to observe that at times when we most anticipated things,
> > they were
> > in
> > fact already fully discounted (good examples are pre-crash of 1987
> > euphoria,
> > post crash gloom, pre Gulf war start gloom or recently rate gloom in
> > october
> > 99). So I am wondering if inflation jitters are not more than discounted
> > already. After all bonds slumped more than for the Peso crisis
> > which was a
> > much
> > more threatening piece, and 99 was the worst or second worst year ever: I
> > call
> > that exageration or at least great anticipation of the worst possible
> > outcome,
> > and find it quite overdone. It is always when people most dread something
> > (y2k....) that that something is actually already in place, and
> > things turn
> > out
> > quite differently. Every body sees the wide gap between slumping bonds and
> > rising stocks, and everybody expects stocks to surrender. Press and
> > analysts
> > coverage is unanimous on that matter. Well I venture to think, we might
> > have a
> > sideways overall stock market (with lots of rotations) while bonds rise
> > slowly
> > with the different Fed raises over the next months.
> > Then sometime in 2001 or 2002 it all boosts to big new highs again...
> >
> > How about that?
> >
> >
> >
> >
> > mknapp@xxxxxxxxxxxxxx wrote:
> >
> > > As a child, my mother used to chastise me that if I made faces, those
> > faces
> > > would eventually stay that way.  That's how I view inflation.  Enough
> > people
> > > are frowning inflation, it will eventually rear it's ugly head.
> >  Reality
> > is
> > > what we make it.  If we believe there's inflation, we WILL create it.
> > >
> > > scrunched facingly,
> > >
> > > Mike Knapp
> > >