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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (67666)	9/14/1999 1:29:00 PM
From: benwood	Read Replies (1) \| Respond to of 132070

Safeway has certainly sent me a lot of $10 coupons and discount bags for groceries to entice me into using their Big Brother card. So far, I haven't bitten, nor do I expect to. I'm lucky to have a good alternative grocery store in my area (better, actually), though, some aren't so lucky. I suppose if the coupon gets big enough, I'll cherry pick some sales off their shelves and then discard the card. Then next sale, I'll do it again!

To: Les H who wrote (67666)	9/14/1999 5:18:00 PM
From: Knighty Tin	Respond to of 132070

Les, I am just disappointed that The Mustang Ranch closed down before this "free" idea caught on. <g> And I'll never forget Houston's own newscaster, Marvin Zindler, for shutting down The Chicken Ranch. But it did make for a good musical and a lousy movie. <g>

To: Les H who wrote (67666)	9/14/1999 5:32:00 PM
From: Les H	Read Replies (1) \| Respond to of 132070

TALK FROM TRENCHES: RETAIL SALES SLAM US TSYS; BRACED FOR CPI By Isobel Kennedy NEW YORK (MktNews) - U.S. Treasuries got hammered Tuesday morning following a stronger-than-expected retail sales report. Volume was decent on the downside but sources say it is hard to tell if the bulk of the selling came from long-term bears who were setting up more shorts ahead of Wednesday's key consumer price report or from day traders setting up shorts they will cover today before the CPI is out. But for sure most of the selling came in the long-end, as the 2/30Y curve steepened to +43 from +40 bps Monday. Usually, the curve flattens when the market sells off, but today there were sellers in the long end and buyers of the front end. These players reason that if Wednesday's consumer price index comes in stronger than expected, the long end will get hit harder on the inflation fears. At today's lows the long bond was down about 1 point from the session's highs. Some veteran players say today's retail sales jump increases the chances of a Fed tightening at the Oct 5 FOMC to 70% from 50%. And a worrisome inflation reading tomorrow will increases that chance to 90%. On the other hand, if CPI comes in at the Street estimate of +0.3% overall and +0.2% in the core, it reduces the chance of a Fed hike to 50% and the long bond might rebound one full point, players say. It would take an inflation reading below consensus in both the overall and core to convince the Street that the Fed is totally on hold. Whatever happens, the CPI is being called "the last piece of the puzzle" that many in the Street want to see before they recommit to the market on the upside or the downside. The Bank of Japan intervened by selling yen again last night but it has not stopped the dollar's slide. The currency hit a three-year low of 105.17 in New York trading hours. By the way, Japan's Finance Minister Miyazawa said Monday night that the rising yen was a "Japanese problem and therefore the problem should be dealt with by Japan." He also said it does not make any difference if Japan goes it alone or gets intervention help from other countries. So ... guess there is no need to talk about the weak dollar afterall at the upcoming G-7 meeting! There's a holiday in Japan tomorrow and there'll be no U.S. Treasury trading during Tokyo hours. But the foreign exchange market is open and so the Bank of Japan could still intervene. Sources recall a Japanese holiday in early July when the BOJ intervened through the New York Fed using its own funds. The Japanese bond market did better in overnight trading on the belief that the strength of the yen will prevent Japan from raising rates. It is interesting to note, according to the minutes of the BOJ's July 16 monetary meeting, that board members said the risk of an economic "double dip" towards the latter half of the year "persisted strongly." Unfortunately, it appears that the Japanese consumer has yet to do its part to spur economic recovery. Over in Europe, the mood in the credit markets remains cautious but the U.K. gilt market was the star performer today. It seems that better- than-expected inflation figures for the U.K. have some analysts questioning why they raised rates last week. There is even talk that Bank of England Governor Eddie George might be forced to write an explanatory letter to the Chancellor -- and this risk could delay further monetary tightening. Wow, think that could ever happen to Mr. Greenspan? Bank of England Monetary Policy Committee member Wadhwani, who is participating in a panel discussion sponsored by Merrill Lynch, said Tuesday that he is concerned about the high valuations of U.S. stocks and the apparent market complacency that bubble trouble could never occur down the road. He may be one of the few people concerned. According to Tuesday's U.S. Q2 current account data, net foreign purchases of U.S. assets were a record $77 billion, excluding U.S. Treasuries. They bought $28 billion in stocks, a whopping increase over the Q1 figure of $8.8 billion. Foreign accounts also bought $48 billion in the U.S. private debt markets while continuing to divest themselves of pure-vanilla U.S. Treasuries. U.S. credit spreads continue to narrow because U.S. domestic accounts are buying this market too. Also supporting spreads was last week's Federal Reserve Y2K announcement that eased year-end liquidity fears. In addition, the announcement is allowing corporations to stagger their new issue supply out later in the year instead of being forced to crowd all new sales into September and August. Here's good news for Asia: The Asian Development Bank said in its mid-year review that Asian economies are recovering faster than expected and growth this year and next should average 5.5% across the region based on continuing improvements in domestic demand and growth in world trade. However, if this recovery is to be maintained, these countries must follow through on reform, particularly in the banking and corporate sectors. By the way, market players on the Eastern Seaboard are watching the movements of Hurricane Floyd which could become one of the most devastating storms of this century. There is already chatter that some insurance companies were selling U.S Treasuries today to raise cash for any claims that might emerge if it hits U.S. shores. --Rob Ramos, Joe Plocek, Dennis Pettit contributed. NOTE: Talk From the Trenches is a daily compendium of chatter from Treasury trading rooms offered as a gauge of the mood in the financial markets. It is not hard, verified news.