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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (24862)1/18/2005 11:16:21 PM
From: John Vosilla  Read Replies (2) of 110194
 
<Kind of what telecom looked like in early 2000, warning flags, yet nobody cared. Financial/housing Bubble Bust alert du jour >

Early 2000 going back 5 years to the day the 5, 10 and 30 were all at about 6.7% while the 13 week T-bill was at 5.3%. The spread between the 10 and 2 was somewhat smaller than it is now. No doubt with a couple of more quarter point rate hikes we will be in a similar position again if the 10 and 30 remain benign. Maybe watch also for the spread between the 10 yr and fed funds to be less than 150 basis points as another alert to recession. In any case I cannot fathom the true cleansing of debts and serious recession we need without a real backup in long term rates first. Perhaps it will be two recessions with the first one the shallow one and the one down the road 18-36 months the true bursting of the credit/housing bubble?
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