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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Real Man who wrote (111441)7/6/2001 6:45:33 PM
From: pater tenebrarum  Read Replies (2) of 436258
 
wrong. it shouldn't. Ascani's study shows that its nominal price tends to stay stable in deflations. regarding the long bond, its yield is less important to the deflationist theory than the spread between the t-note and BAA corporates. and that spread is now higher than during the '98 crisis, as the increase in default risk gets priced in. imo the bond market is a bit wary of the Fed's REACTION to the gathering deflation, which is to shove as many fresh out-of-thin-air clownbucks out the door as possible. well, the BoJ tried that too...
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