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Strategies & Market Trends : Classic TA Workplace

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To: sandeep who wrote (19009)	11/1/2001 8:03:41 PM
From: velociraptor_	Read Replies (3) of 209892

Come on...I can't believe this is your point to debate. The shorter term bonds will lead to closed out profits much sooner than a 30 year and after paying some taxes on that, you're not left with much. It's basically a capital preservation game and that's about it. Throw in a little inflation which is what we may end up with if the government keeps pumping up things that way they are and expanding the money supply and you definitely have a zero sum game for the shorter term bonds. The shorter term notes were already low in yeild, while the longer term wouldn't drop no mtter what they did. By eliminating the 30 year you completely cut out the bad side of the curve. Some of that money probably will go to the 10 year, but the extra demand will drive the yeild down to essentially flatten it like the short term. Again, it's a zero sum game. The bulk of the money will likely look for higher returns and move to equities...a move which will force the market higher on artificial terms. Eliminating the 30 year has ulterior motives and is not as simple as just looking to pay lower rates. Put two and two together and you'll see that. On the M3 money supply, yes risky time, but it is not a short term fix. The money supply has increased by many factors over the last 8 years so it has been going on for quite a while now and it continues to grow. Also, how can you say that the state of the economy looks good? There is not a thing you can point out to prove so. A million people have been laid off this year so far and that doesn't include those from non reporting companies and businesses. The US savaings rate is negative. Consumer and public debt is at an all time high and increasing. Economic indicators are quickly dropping below 1991 levels which was the last recession. Earnings are falling at a rapid rate and show know inprovement at all. In fact, because of earnings our market is now at historical highs. Forget 1999/2000. We've beaten that now because the market has not fallen near as fast as earnings have. We're on the front of a war whcih we have no idea where it is going or how long it will last. Even our own country is still at risk because the terrorist methods are uncoventional. It took only 20 guys to take out two of the most prominant buildings in our country. Don't even think they couldn't do anything else.

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