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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Mike Johnston who wrote (70114)9/22/2006 4:03:09 PM
From: Crimson Ghost  Read Replies (2) of 110194
 
A generation ago the kind of bond rally we have seen recently would unquestionably be signaling both a slowing economy and easing inflation.

But today does it really signify anything more than a credit bubble still careening out of control with the "boys" squeezing the shorts ruthlessly on the slightest excuse.

I think it was John Hussman who pointed not long ago that treasuries have traditionally rallied hard only after credit spreads had widened sharply and stocks and commodities had dropped markedly.

Commodities have indeed eased considerably in recent weeks, but the senior stock averages are at or near cycle highs while credit spreads remain near record lows.

A VERY different kind of treasury bond rally indeed. Especially considering that it started when long rates still were relatively low.
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