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To: Sarmad Y. Hermiz who wrote (64455)	6/24/1999 4:26:00 PM
From: GST	Respond to of 164684

<There is a large budget surplus. Supply of bonds should shrink. Why will treasury rates go up ? 200 $billion will be released from bonds.> Sure, if it was American money in those bonds. But it is not. Americans have a negative savings rate - think about it. If foreigners don't buy the bonds, yields rise.

To: Sarmad Y. Hermiz who wrote (64455)	6/24/1999 4:35:00 PM
From: GST	Respond to of 164684

Sarmad <You'd expect amzn to go down 100 pts> This move 'anticipates' a change of trend. The insanity is to think it is time to buy now that the trend is arriving and hitting the market as a whole! There is nothing, absolutely nothing, to keep net stocks and their kind from being cut in half again from here. The nets were the prelude. This is the main feature. This is not some little dip to be bought. The decline does not appear to over -- the complacency suggests it is just getting itself into second gear. A long bond at 6.5% will suck money from stocks like crazy. What kind of institutional money manager would rather have the skaky stock market here when you could get the 6.5% coupon and maybe even some capital appreciation? This is a very dangerous point in time.