Advanced Micro Devices - Moderated (AMD) Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Advanced Micro Devices - Moderated (AMD)

AMD 245.99

+5.3%

10:16 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: niceguy767 who wrote (32426)	3/21/2001 7:03:53 PM
From: TGPTNDR	Read Replies (1) of 275872

Niceguy767 Re: <"NG: Re: <Assuming long rates remain as is, I can't imagine why a 150 basis point drop in short rates wouldn't assist the markets greatly!!! > The problem is that long term rates reflect forward inflation sentiments and vary inversely to short term rates. Thus your 'Assuming...' cannot be." Not sure what you mean...30 year bond rates at %.3% don't hint of any perceived inflation threat as far as I can see...The short rate is in some ways a manufactured rate with one determinant being fed policy...Short rates are currently about 150 basis points higher than they should be vis a vis long rates...The fed should waste little time in addressing this rate imbalance, imho!!! > I tried the short answer & you didn't get it. Now I'll try the long response. From above: long term rates reflect forward inflation sentiments and vary inversely to short term rates. What that says is: When short term rates are high expectation is for decreasing productivity & demand for money. Long term rates normally decrease. When short term rates are low, expectation is for increasing productivity and demand for money. Long term rates normally increase. Thus, if you get short term rates lowered 1.5% the chances are that you'll get long term rates more than 1.5% higher within a couple of months. That's how it works. And the long term high rates hurt more than the short term high rates. Especially if they remain higher over the long term -- as they did in the late 70s. The common 'spin' on wall street is that inverted interest rates precede recessions. They certainly precede slowing economies and stock market drops. That's where the old line 'don't fight the fed' came from. It's a tough damn job the fed has to do. They are balancing the wants of their member banks(Keep short term rates as high as possible) with the wants of congress(maximum growth consistent with low inflation) while trying to maintain monitary stability. It's easy to do one of those three things, a little harder to do two, and all three somewhat conflict. tgptndr

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next