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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: kimberley who wrote (23940)	8/27/1999 11:11:00 AM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 99985

Kim, the inflation indexed bonds get adjusted to the rate of inflation reported by the government. If the market sense that those reported numbers are not accurate they adjust the bond prices. Presently the market tells you that the US inflation is under reported therefore the indexed bond trade below par. If inflation was reported higher than the actual rate the bonds would trade above par. The government under reports inflation for lots of reasons, one being to rob the social security recipents of their compensation and keep the SS afloat, to issue bonds at lower interest rate, and to politically to give the impresion of a great economic enviroment. Remember I did not inhale and I did not had sex with this women. BWDIK Haim