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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 659.00+1.0%4:00 PM EST

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To: James F. Hopkins who wrote (18289)6/23/1999 1:22:00 PM
From: pater tenebrarum  Read Replies (1) of 99985
 
Jim, i have read an interesting theory by a guy who's concentrating on cycles...he says that often when cycles end (as the current 9-month cycle is scheduled to do around july 7), liquidity in one of the various asset classes dries unexpectedly up. while he's currently a proponent of stock market liquidity drying up in this cycle, his alternative scenario calls for a crash in the bond market.btw, i agree that the 'big money' is reluctant to fund the bond side of things as long as rates are so low. corporate debt and household debt have increased dramatically in recent years, and that has skewed the risk profile of fixed income securities in general. an economic slowdown could lead to massive private sector defaults...that's when demand for treasuries will truly revive.

regards,

hb
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