Carl, I think that 6% will be a line in the sand, and I think that if the long bond goes above it, Greenspan will be pulled kicking to raise the fed rates as well. That will not end the current bull, but will put a serious dent in it. If Greenspan actually raises the rates (which i think he will resist because of the still fragile world economy, we are the only economy really growing, maybe Korea has started as well, but from such deep through, it will not add enough to world demand), we may go into a deep downturn in the market.
remember the other side of the equation, a lot of liquidity slushing around, enough, IMHO to stem the rise of interest rates at about 6%.
Zeev |
