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Biotech / Medical : Biotech & Pharma.T.A,

BIB 83.68

+0.1%

Nov 28 4:00 PM EST

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From: John McCarthy	12/27/2005 9:34:29 PM
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Jibacoa Hi .. I never post here but lurk here a bunch. Before I begin let me quickly state: If this post doesn't fit the premise of this board then just DELETE IT .... Premise .... We are going into a Inverted Yield Curve thingie ... As I understand it from (a few google links) it may portend an upcoming recession .. and I am not seeking to debate this or get into any polemics about what it means ... What I thought might be useful in terms of what you do is the following: (a) What do market averages (you decide which ones) look like during an Inverted Yield Curve ..... (see 1981 link below) (b) What do market averages and the bio tech indexes (you decide) look like in an Inverted Yield Curve (c) (a) and (b) are dumb ideas and you have a better one .... in comparing results during Inverted Yield curves .... For those that might be interested here is what things looked like in 1981 .... smartmoney.com Here are generalist(s) links about the topic ... Inverted Yield Curve investopedia.com An Investigation into Inverted Yield Curves and Economic Downturns - PHD Dissertation 2004 (have not read) mises.org VERY GOOD ARTICLE Inverted yield curve edges closer If you haven't been worrying about the Arturo Estrella, an economist at the Federal Reserve Bank of New York who has done a great deal of research on the term structure, has a a nice summary of the academic research on the relation between an inverted yield curve and economic recessions (hat tip: Economist's View). One reason that the yield curve inverts prior to an economic slowdown is that economic recessions tend to mean lower interest rates, both because of lower demand for borrowed funds as well as the fact that the Fed is likely to lower rates aggressively in response to an economic downturn. According to the expectations hypothesis, to the extent that investors see this coming, the yield curve would start to slope down before the drop in economic activity econbrowser.com Yield curve - From Wikipedia, the free encyclopedia en.wikipedia.org Jibacoa Again - I am NOT trying to screw-up your wonderful board .... so please just KILL this post if annoying or to far OFF TOPIC ... I posted here because (I think) all stock action in some way shape or form is gonna be affected by this Inverted thingie ... and graphics help to show the bigger pciture better than any medium I know of .... If nothing else maybe its food for thought and you'll come up with your own meangingful way to present the subject ..... regards, John McCarthy

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