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Technology Stocks : Global Crossing - GX (formerly GBLX) -- Ignore unavailable to you. Want to Upgrade?

To: JPLoos who wrote (2321)	10/5/1999 3:17:00 PM
From: AurumRabosa	Respond to of 15615

Thanks for a differing view on the Bond Market. Essentially you are saying (correct me if I am misunderstanding you) that the demand for Mortgages and the demand bonds as an investment will continue to increase because: I expect interest rates to rise 0.25-0.5% in the next few months. Then I expect the bond bull market to resume. How low will rates go? I don't know, 5% easy and 4% would not surprise me in the next few years. I only pay attention to Treasurys (bills, notes & bonds). I do not pay any attention to mortgage rates. 1.) 2/3 of our economy is based on consumer spending and this finance vehicle(bonds)is in high demand I believe that for years now the demand for US Treasurys has been higher for foreign money than US money but that trend has now changed. 2.) The aging population (Baby Boomers)are rotating out of stocks into bonds? Or not yet? I don't know, I doubt it. It wouldn't be a bad idea though, especially for those with an all stock portfolio. 3.) And perhaps the most important : If Greenspan can get away with his part of the equation, he has a point or more to tweak the economy as he sees fit. The FOMC lags the bond market but they sure get a lot of press. I believe the Fed has been too loose with the money supply for too long and by deferring the pain of raising rates they will only make the suffering greater when Mr Market takes matters into his own hands and finds the true value of stocks. 4.) The over seas markets are seeing strength and are rotating out of the U.S. T-Bills They're rotating out of all Treasurys; bills, notes & bonds. My stance is based on the following: there is a tremendous amount of money looking for a safer home than the U.S. stock market. I agree with your statement that demand for bonds may rise short term (6 months - 1 year) but I have to believe the increase in money rotating out of the stock market will be in search of a safe home. This is the ultimate crystal ball speculation but, the Stock Market will see a correction that makes the Baby Boomers think twice about their portfolios. Hence the Baby Boomers will be the ones to bid up the Treasury Bills. I meant that demand for bonds is waning not waxing. Rates are inversely proportional to bond price. Now rates are rising and bond prices are dropping. tradingcommodities.com finance.yahoo.com^TYX&d=5y I also expect the spread between Treasurys and junk bonds to increase because of the rising risk of defaults. Too many unworthy companies were able to sell junk bonds and now some expect the default rate to skyrocket to 6% this year. After the market correction that gives baby boomers pause they will bid up Treasurys in a flight to quality and rates will drop. As for a safe haven, when currency exchange rates make a major trend reversal the first safe haven is your home country and you remove the exchange rate risk. What do you think about Europe? Can the European stock markets rise while the US stock market is stalling? As for GBLX we are in the midst of Market Maker Madness. They are jerking this stock all over. But what a great buying opportunity. I really love this stock. Please tell me what could go wrong. I am afraid I like too much. A new poster on this thread, a former Iridium investor, asked some outstanding questions. I find it's too easy to fall in love with "the dream" story and not adequately evaluate the downside risk. I still have a lot to learn about GBLX but at this point I like what I see and I'm buying more on dips. GBLX is my 3rd largest holding and I expect it to be my largest holding by xmas.