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Politics : Idea Of The Day

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To: IQBAL LATIF who wrote (18584)	6/12/1998 12:53:00 PM
From: Lee	Read Replies (2) of 50167

Good Afternoon Ike,..Re:<< Market opens everyday if you lose your capital you lose every thing. Never be over confident, and ready to ditch your positions once key supports are taken out>> Ike, it looks like key rate supports are taken out and we are now at all time lows, currently 5.639%. It seems incredible that rates can sink to these levels in the face of a very strong domestic economy and would not be at these levels except for 'flight to quality' buying. On the 10th, USU opened up 16 or 17 from overnight buying and AGs testimony added another 15 ticks. I am surprised he is being so cautious in the face of existing conditions. Sept. Bond opened this morning at unchanged and rates went lower at open but the PPI caused a reverse at 8:30. Now, the reverse is gone and we are proceeding to lower lows. chart1.bigcharts.com:80/report?r=chart&onbad=badsymbol&country=us&time=7&freq=1&compidx=aaaaa%3A0&ma=4&maval=9&uf=7168&lf=1&type=2&style=3&size=2&symb=TYX&comp=&sid=11421&sec=x&xyz=11608984&s=7752 Since the Fed can't lower rates in the face of this economic strength and since the Japanese can't do anything about the yen, it looks like we might see 5.5% on the long bond; even if the 2,5,and 10 yr notes are also just below this rate. Greenspan does not think that we have artificially high real rates and I suspect takes some comfort from the market keeping rates more toward 6% given the economy's strength. AGs reasoning is discussed in the attached article. economeister.com FED'S GREENSPAN DENIES REAL FEDERAL FUNDS RATE TOO HIGH Thanks for your posts and especially the wider world views. Lee

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