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Politics : Idea Of The Day

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To: steve susko who wrote (16324)1/13/1998 7:29:00 AM
From: Lee  Read Replies (1) of 50167
 
Steve, Re:<< Are you saying that if bond yield goes up (bond price goes down), it will funnel more money into the equity market and help the market to rally ?>>
I can think of three reasons. Markets are more afraid of (or uncomfortable with) deflation than inflation, banks will stop being squeezed, fear of SEA collapse will abate. Bonds are too expensive now for the risks. If the constant flow of capital into bonds stops, this will allow people to go back to equities as they will determine that the economic crisis in SE Asia is on the mend or under control.
JMHO
Lee
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