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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: John Pitera who wrote (40326)5/11/1999 2:25:00 PM
From: Defrocked  Read Replies (2) of 86076
 
Regarding any prospective Fed tightening, I think
the first move by the bonds Tuesday should potentially be
faded. Consider the following two alternatives,
(1) the Fed does nothing or (2) the Fed bumps the
target up 25 bps in a "preemptive mode".

If the Fed does nothing, the initial move by bonds
may be to rally. Such a rally would be short lived
IMHO as sellers would use the opportunity quickly
to establish hedge and spec. positions due to a
spineless Fed.

If the Fed bumps up the target by 25 bps (50 bps is
not in the cards without serious core inflation) an
initial selloff due to "tightening" should possibly
be bought since any move by the Fed indicates at
least some resolve on the inflation front.

JM2c. Subject to change without notice.<g>

Man, did that bid-to-cover ratio stink for the
five year, 1.74 jeeze.

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