EMC How high can it go? Message Board

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Technology Stocks : EMC How high can it go?

EMC 29.05

0.0%

Sep 15 5:00 PM EST

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To: Bob Frasca who wrote (9025)	1/28/2000 10:35:00 PM
From: SJS	Read Replies (3) of 17183

Bob, The REASON why the long bond is going up right now (yield going down) is because the gov has said that they are going to be buying back some of the 30 long bonds and retiring that debt. The swirl of people (traders, institutions, etc.) buying 30 long bonds to have them in their posession so the gov can pay top dollar is what is causing the 30 year long bond to rise and the yield to fall. It's gotten so bad that the yield curve is now inverted. IE, the 30 year long bond yield is BELOW the other yields: 10 year, 5 year, etc. In the past, when this happened (without the gov buyback thingie driving it this time....) it has always signalled that a recession was around the corner. A false read now, and it would appear that that's not in the cards this time. Since mortgage rates for folks that want to purchase new homes is pegged to the 10 year note, there has been a rethinking of just how important the 30 year long bond is as a benchmark. Many are thinking the 10 year better reflect sentiment and demand vs such a long timeframe bond like the 30. Hope this helps.

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