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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club

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To: E_K_S who wrote (11384)1/22/2000 11:57:00 PM
From: Demosthenes  Read Replies (1) of 15132
 
Eric,

<<My final concern is that the yield curve between 10-year Government Notes and 30-year T-Bonds has just inverted, meaning that the shorter-term instrument now has a higher yield. It's only by a very small amount, but it often brings on problems. For example, in the steep market decline of 1998, which started on April 23 when I gave my sell signal, and ended in early October, this yield curve was inverted virtually the entire time. Yes, the yellow light is flashing.>>

Bob addressed this exact concern today and said the comparison is a good indicator of oncoming recession, but only with comparisons between the 30yr and short term bonds, i.e., 5 yrs. or less. So his yellow light is flashing, but not in any way due to what you describe.

D
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