Stockman Scott's Political Debate Porch Message Board

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Politics : Stockman Scott's Political Debate Porch

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To: Jim Willie CB who wrote (1583)	7/7/2002 1:10:25 PM
From: SGJ	Read Replies (1) of 89467

<<do you think GSA's will open the door to USTBond vulnerability? I mean expose the Trez market? outside higher yields, what can be the effect?>>>>> My personal opinion is the government will continue to distance itself from the GSA's as it has been doing. Listen to what they have been saying lately. TBills not "downgraded" per se, but a rate rise will be likely. The most optimistic I know see at least 100 bp TBill rate rise by year end. Tempering this eventual decline in Tbills is that there is not much other places for conservative money to go. USTbill could be construed as safe haven, but at higher rates so that recent buyers would take a hit. On a global curve, it will be still be the winner, with more competition from the Eurobond. I was mainly referring to corporate debt issues, especially telecom. Lots of it lurking in bond funds and collateralized debt obligations. Even if its not the greatest part of a particular fund or CDO, it could spark a liquidity crisis. Thats where the risk is IMO, on that margin. Other credit markets are also at lesser stages of alarm right now. All I have time for now. Going to get out and enjoy the day. Have a great day!

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