Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: William H Huebl who wrote (45840)	2/3/2000 9:41:00 AM
From: Paul Berliner	Read Replies (2) of 94695

As we all know, the violent move the last two days in the 30 yr. is mostly due to the closing out of losing FOB and NOB trades. There is otherwise no way in hell the 30 yr. would get bid up so violently. News reports are saying that its because of the buyback announcements - but the 30 yr. bonds to be bought back are two decades old. The recent runs are not going to be bought back, and in fact, will be 'reopened' on occasion as per the Treasury's statement yesterday. I;m going short mortgage REITS right now - the vols are very low on their options. This situation has all the makings of a disaster for their carefully crafted portfolios. It is different from the fall of '98 only that there is still ample liquidity, however, the margin calls will come anyway.

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