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To: Defrocked who wrote (53068)	7/26/1999 10:30:00 AM
From: John Pitera	Respond to of 86076

Def, Briefing.com has been commenting that Big Money continues to be reluctant to move into spread products due to Y2K and the rush to get increase corp. liquidity in the next 2 months, by issuing paper. While a weak dollar weighs on the long end, the intermediate sector remains hampered by the continued barrage of corporate and mortgage paper coming to the market. As we noted last week, there is little incentive on the part of real money to move into spread product ahead of the millennium, and while corporations were already pressed to issue paper before liquidity dries up by the end of the Q3, the rush is expected to be even more pronounced now that the Fed seems to further inclined to either shift to a tighter monetary policy, or at the very least, keep the market's on alert with a move to an asymmetric bias at the end of August.

To: Defrocked who wrote (53068)	8/4/1999 11:11:00 PM
From: Lymond	Read Replies (2) \| Respond to of 86076

Fixed income update: Do people watch anything besides the long bond? I have to laugh at all the commentary I read today about how the tech stocks swooned even though bonds "rallied" today. Listen, we saw nothing of the sort. Sure, the long bond did well. But this was for technical reasons, as Treasury announced that there would be no 30-year auction in November. Shorter maturities did not move much at all. Moreover, spreads continue to widen. 10-year swaps today traded at +105 -- an all time high for the 1990s -- while agency spreads remained at recent wides despite very strong demand for the new FNMA 5-yr deal. Corporates also continued to struggle in the face of sustained heavy supply. In short, the tone in fixed income markets remains overwhelmingly bearish. Fixed income spread valuations remain at historically cheap levels, while equities remain in la-la land, despite some recent pressure on the i-nuts. This, combined with the dollar's recent weakness, makes me think that stocks are extremely vulnerable right now. BWDIK.