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Strategies & Market Trends : Sharck Soup

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To: Softechie who wrote (22488)5/11/2001 3:29:59 PM
From: fswep  Read Replies (2) of 37746
 
SoftTch,

Your talking about two different types of bonds. The telcom bond is a "junk" corporate with a rating below BB, I believe. This bond is tied directly to the ability of the issuing company's ability to payback the debt.

What is being referred to in the articles is the long term treasury. The t-bill is not something that you want to be caught in if there is inflation. If you have a bond that is paying 4% coupon and there is a new issue of 5% you are screwed if you have to sell. So the price falls until buyers are found.

Take a look at this web site it usually explains what is happening pretty good. While here take a look at the graph of the yield curve, this is looking very bullish.

bloomberg.com

I tried to paste the link directly to the article, but it was too big. So go to the menu on the left and click on Top Financial news; then click on the second news story.

Ward
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