Between about February and August it looked as if the Fed was cutting back on expansion of the money supply, which had been very high at the end of last year, possibly in response (among other things) to the October, 1997, drop in the stock market. I guess it does not really matter where the treasuries are coming from if the Fed decides to buy them in, and I guess there is always the possibility of foreign holders, especially the Japanese, selling their holdings.
This buying by the Fed may have stopped as the stock market took off--in any case the long bond dropped a good bit. The increase in blue chips as opposed to a decline in NASDAQ stocks of the last couple of days, plus the decline in interest rates, may represent a renewal of "flight to safety" that precedes a general and sustained decline of equities.
Well, all this has been an education--at times, rather expensive. Maybe I will get the hang of it sooner or later.
Checking:
amgdata.com
(click NEWS)
Still (if we can believe the figures, which Joseph G. cannot) the inflow to mutual funds may be slackening again and maybe the Fed will allow the market to deflate again. If they keep meddling with surprise move, they may really set something off. |
