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Strategies & Market Trends : Steve's Channelling Thread

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To: Zeev Hed who wrote (16290)5/21/2001 9:42:21 PM
From: Jim Willie CB  Read Replies (2) of 30051
 
got a bond related question for you, and anyone else

the only danger signal I see is the lack of a long bond rally in past two months
10yr and 30yr yields are no better than the February levels
that is highly unusual
tells me either inflation threat is imminent
or else liquidity problems in bond-land (not enough buyers)
with all this sidelined money, not much is finding its way into long bonds
that is irregular and atypical, if not unusual and suspicious
why not?
what is your take?

sure, money can exit bonds and seek stocks for better return
but in past fed easing cycles, money goes into both bonds and stocks
that has often fueled a powerful rally in bonds, which then favorably affects the pricing models for stocks
which fuels a rally in stocks

so, this may be the climb of a wall of worry alright
just curious for your take
thanks, Jim
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