Waiting for the big Kahuna Message Board

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Strategies & Market Trends : Waiting for the big Kahuna

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To: Bonnie Bear who wrote (5590)	9/24/1997 2:29:00 PM
From: Tommaso	of 94695

It may be only a temporary thing, but at this moment the stock averages are decoupling from bonds. Bond interest rates are taking a big drop and stocks are weakening at the same time. What both Templeton and Buffet may have been anticipating (in turning to bonds) was a fear-driven flight to quality, which would lower interest rates. In the 1930s (and again in Japan right now) interest rates went to zero. I wouldn't expect that, of course, but a drop to 4% or lower on 30-year bonds would be a bonanza for owners of treasury strips.

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