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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: accountclosed who wrote (19273)2/12/1999 9:54:00 AM
From: Defrocked  Read Replies (1) of 86076
 
I agree with you on this AR. A "crash" in US Tbonds
is unlikely as it will be met with buyers allocating
funds from stocks. A slowburn in bonds is much more
to my liking. Bonds are more likely to trade within
these two scenarios creating choppy conditions with
great bear market characteristics of brief runups
followed by gaps down due to low liquidity, e.g.today.

Luc should keep in mind that bonds went from 7.3%
to 10.25% yields from Jan87 to Oct87 and back down
to 9% in just four days the week of Oct.19. Given the bond
had a duration of around 10, 125 bps represents apprxly.
12.5% change in price...exactly the action a
person short bonds has to worry about. So of course
I'd rather see the slowburn.<g> I think the Fed does too.<ng>
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