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Technology Stocks : Semi Equipment Analysis
SOXX 306.040.0%Dec 26 4:00 PM EST

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To: Return to Sender who wrote (29702)3/28/2006 11:33:58 PM
From: sammy™ -_-  Read Replies (1) of 95640
 
Hello RtS,

Because the spread between long-term and short-term interest rates has been virtually nada for much of the first quarter, the bond market is suddenly accumlating a lot of interest. A yield inversion has occurred roughly one to two years prior to each of the last six recessions, and although the bond market has flirted with such an inversion for the last four months, an absolute inversion hasn't happen.

The inversions tend to last the better part of a year. Inversions coming before recessions tend to be fairly prolonged ones, imo. The only fully inverted curve to “cry wolf” and not precede a recession occurred in 1966—the inversion was short-lived and, like today, the reason for the inversion was the abnormally low long-term interest rates, rather than high short-term rates.

yo
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