|
PureBytes Links
Trading Reference Links
|
Just adds to the cost of domestically producted
products as well as Ag products.
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
EarlA
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, January 06, 2004 10:47
AM
Subject: Re: [RT] Fwd: bond market
forecast for 2004
Bigger problem as I see it is very near term ... prices of NG and CL
continue to trend higher placing a very real tax on the economy and consumers.
Energy prices have been moving inversely to the US$. If the Fed/Admin/Market
don't raise interest rates to support US$, energy prices will continue to rise
creating a major political issue for the guys running things.
Earl
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
<A title=mr.ira@xxxxxxxxxxxxx
href="">mr.ira@xxxxxxxxxxxxx
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Tuesday, January 06, 2004 11:08
AM
Subject: Re: [RT] Fwd: bond market
forecast for 2004
Cycles have a way of expanding and contracting. Your
assumptions could verywell be right. I see some other factors that
might impact the movement inthe bond price. The CRB is moving to
new highs almost every day. I have aprojected high around
296. Gold has not seen its peak as yet. The fall ofthe
dollar means that everything we import will go up in price.
Housingprices are rising at a rate of 20% per year in our area.
Health care andinsurance prices are rising. Gasoline and natural
gas are still nearall-time highs. The government has a trillion
dollar debt to refinance andhas to come to market for that. that
debt is increasing every day and thatwill provide competition for
dollars. All of these factors foretell ofimpending inflation, no
matter what the government says. Can they holdthe
bluff until after the election? A good question. How does
thegovernments stop inflation? Raise interest rates.Just
some thoughts from the other side of the coin. Ira.-----
Original Message -----From: "topos8" <<A
href="">topos8@xxxxxxx>To: <<A
href="">realtraders@xxxxxxxxxxxxxxx>Sent:
Tuesday, January 06, 2004 9:45 AMSubject: [RT] Fwd: bond market forecast
for 2004--- In <A
href="">gannsghost@xxxxxxxxxxxxxxx,
"topos8" <topos8@x...> wrote:THE U.S
BOND MARKET IN 2004On December 29, 1982, with long term U.S treasury
bonds yieldingclose to 11 % and the bond futures trading near 60 (basis
newcontract) I published a long term bond market forecast. This
wassent to subscribers of my newsletter, The Cyclic Forecast,
whichceased publication in 1983.Not once over the past 20 years
have I been tempted to alter theconclusions reached in that forecast,
but now might be a good time tobring it up to date.The thesis of
that forecast was that a new long term cycle in bondprices and interest
rates had begun at the September 1981 peak inlong term interest rates
when the 30 year treasury bond was yielding15.30%. I expected the new
cycle to evolve in a way similar to thecycles that had begun at the two
previous long term peaks in interestrates in 1857 and in 1920.I
quote from the December, 29, 1982 forecast: "If the bond marketfollows
the average of these two historical cycles, then bond pricesshould be in
a generally rising trend for the next 30 years. Thepeak in bond
prices and the low in long term interest rates is notdue until the year
2010...long term bonds are once again (a) highreturn, long term
investment vehicle and will remain so for ageneration to
come."Over the past 20 years I have often reiterated the conclusions
ofthis forecast in conversations with my consulting clients. In fact,
Ihave often asserted that before this bond bull market ends the
yieldon long term treasury bonds will be BELOW the dividend yield on
theDow industrials. As I write this the U.S. treasury long bond
yieldsabout 5.10% while the Dow's dividend yield is about
2.00%.Needless to say I think that there is yet another big upleg in
longterm bond prices ahead of us (and probably another big downleg
instock prices). My current estimate is that the long bond
willprobably yield around 3.50% sometime in 2008 while the
Dowindustrials will then show a dividend yield of around 4.00%. At
thatjuncture a new 20 year bear market in bonds prices will
begin.One way to get a glimpse of likely bond market trends for 2004
is tomake use of the historical averages of price and interest rate
trendsduring the bull market in bonds that began from the 1981
lows.First of all it is probable that the June 2003 top in bond
prices(123 in the futures and a yield of 4.14% in the long bond) was a
topof importance comparable to the tops in 1993 and 1998, the last
twotemporary tops in this ongoing bull market. Here's why.At the
October 1993 top bonds had advanced 37 months from theSeptember 1990
low. The futures had rallied 35 points while the longbond had
dropped from a yield of 9.12% to a yield of 5.77%, areduction of 37%. At
the October 1998 top bonds had advanced 47months from the 1994 low.
Futures had rallied 39 points while thelong bond had dropped from a
yield of 8.18% to a yield of 4.65%, areduction of 44%.In
comparison, at the June 2003 top the bonds had advanced 41 monthsfrom
the January 2000 low. The bond futures had rallied 34 pointswhile
the long bond yield had dropped from 6.77% to 4.14%, areduction of
39%. All of these figures show that the January 2000 -June 2003
upswing was comparable in these important respects to theupswings that
ended in October 1993 and in October 1998.The 1993 and 1998 tops
were followed by declines which lasted 13 and15 months respectively. The
bond futures dropped 26 points from the1993 top at 122 while the decline
from the 1998 top was about 27points from 135 (adjusted for the change
in contract specificationthat occurred in the March 2000 contract). From
5.77% in October 1993the long bond yield rose to 8.18% in November of
1994, and increaseof 42%. From 4.65% in October 1998 the long bond
yield rose to 6.77%in January of 2000, an increase of 46%.If the
precedents established by market action following the 1993 and1998 tops
is followed subsequent to the 2003 top I would expect a lowin bond
prices and a high in the long bond yield sometime 13 to 15months after
the June 2003 top, i.e. sometime between July andSeptember 2004. If the
bond futures again drop 26-27 points fromtheir 2003 top at 123 the 2004
low will be in the 96-97 range. If theyield on the long bond increases
42% - 46% from its 4.14% level inJune 2003 it will reach the 5.88% -
6.04% zone at its 2004 peak.The extent of the upwing in bond prices
which is likely to begin fromthe 2004 low is harder to estimate, but I
shall probably not go farwrong if by assuming that it will be similar to
the average of theupswings that ended at the 1993, 1998 and 2003
tops. If it does theupswing will continue about 42 months, i.e
until April of 2008. Itshould carry the bond futures up about 37 points,
i.e to about the134 level. The long bond yield will probably drop
about 40%, i.e to3.50% or so.Carl--- End forwarded message
---Yahoo! Groups LinksTo visit your
group on the web, go to: <A
href="">http://groups.yahoo.com/group/realtraders/To
unsubscribe from this group, send an email to: <A
href="">realtraders-unsubscribe@xxxxxxxxxxxxxxxYour
use of Yahoo! Groups is subject to: <A
href="">http://docs.yahoo.com/info/terms/ ------------------------
Yahoo! Groups Sponsor ---------------------~-->Buy Ink Cartridges or
Refill Kits for your HP, Epson, Canon or LexmarkPrinter at MyInks.com.
Free s/h on orders $50 or more to the US & Canada.<A
href="">http://www.c1tracking.com/l.asp?cid=5511<A
href="">http://us.click.yahoo.com/mOAaAA/3exGAA/qnsNAA/zMEolB/TM---------------------------------------------------------------------~->Yahoo!
Groups LinksTo visit your group on the web, go to: <A
href="">http://groups.yahoo.com/group/realtraders/To
unsubscribe from this group, send an email to: <A
href="">realtraders-unsubscribe@xxxxxxxxxxxxxxxYour
use of Yahoo! Groups is subject to: <A
href="">http://docs.yahoo.com/info/terms/
Yahoo! Groups Links
To visit your group on the web, go to:<A
href="">http://groups.yahoo.com/group/realtraders/
To unsubscribe from this group, send an email to:<A
href="">realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to the <A
href="">Yahoo! Terms of Service.
Yahoo! Groups Links
To visit your group on the web, go to:http://groups.yahoo.com/group/realtraders/
To unsubscribe from this group, send an email to:realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
|