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Strategies & Market Trends : Waiting for the big Kahuna

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To: GROUND ZERO™ who wrote (88882)7/17/2009 9:30:59 AM
From: Skeeter Bug  Read Replies (1) of 94695
 
GZ,

1. people take money from T-bills and put it to work in stocks - think reverse flight to safety effect.

2. a recovered economy is one that will stimulate inflation pressure, so people want a better interest return when they lend money.

the last time were at spx956, mortgage rates spiked to 6% in some cases.

when the market fell and there was flight to safety and deflation concern, rates fell back to the low 5% range. rates are currently 5.25%, so this time has been different, but it won't last too, long, imho, for the reasons mentioned above.
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