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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Defrocked who wrote (20)2/1/2000 8:35:00 AM
From: John Pitera  Read Replies (1) of 33421
 
Well, here it is a more fully inverted yield curve.

geocities.com

as recently as a week ago only the 10 year was higher than the 30 yr in yield now everything from 2 years out to 10 is over the 30 yr in yield.

This can start to cause funding problems for banks and other debt portfolio's especially if we see a further rise on the short end of the curve.

Briefing.com, points out that the Fed will prob. not be swayed by those on the wrong side of the yield curve flattening trade

We have heard various rumors of hedge funds caught on the wrong side of the flattening trend, as well as heavy liquidations of swap and credit spread trades. While it may be some time before the carnage gets sorted out, we are not ready to put much faith in the argument that the recent volatility may help to dampen the Fed's aggressiveness.

In addition, we continue to hear speculation that some firms (financing/mortgage??) have been slaughtered by the magnitude of the inversion, suggesting there is some potential for a steepening correction

I may be on the look out for a short or 2 in the sub-prime lenders...are there any left -g- and other financing/mortgage companies that are losing the big bucks on this inversion.
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