Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Knighty Tin who wrote (71474)	12/4/1999 6:16:00 PM
From: re3	Read Replies (1) \| Respond to of 132070

mike, the nephew (6 yrs old) is over...he says : 'i will never be bored of tv.' i asked why ...he says 'its my favorite thing to do'... how will yahoo make any money with kids like this <g> and this tot refuses to watch hockey night in canada from me...i think he's really from texas <g>

To: Knighty Tin who wrote (71474)	12/5/1999 9:38:00 AM
From: re3	Respond to of 132070

from the toronto star december 5, 1999 Fannie Mae offers early warning on where stocks, bonds are going The current stock-market advance is still alive, but last Tuesday the technology stocks got a shot across the bow. Many high-flying technology stocks suffered one-day hits of at least 10 per cent, though by week's end many rebounded to close out the week with small gains. The technology sector has led the market higher since the lows of last October, and this group should be the first to run out of steam in the new year. This should not be a problem for the major stock indices if we can find new leaders. -------------------------------------------------------------------------------- If interest rates continue higher for much longer, the stock market will suffer -------------------------------------------------------------------------------- The problem we now face is the persistent rise in interest rates. Bond yields have been rising all year as the result of falling bond prices. Rising oil prices early in the year triggered an inflation scare among bond investors. A bond holder demands higher returns during periods of high inflation that eat away at the buying power of income from bonds. So, the investor bids less for new bonds to adjust their return upward, compensating for the inflation loss. This is why bond prices have fallen in North America all through 1999. The stock markets have so far ignored rising interest rates and instead focused on the current strong U.S. economy and the potential for continued business expansion. If interest rates continue higher for much longer, the stock market will suffer for two reasons: Higher bond yields will compete with stocks for money. The current business expansion will be choked by expensive money. A rally in the bond market would mean the current round of interest-rate increases is over for the time being. This would allow the current stock-market rally to continue for several more weeks. When I am in doubt about where stocks or bonds are going, I seek out bellwethers for early direction. In the case of interest rates, I turn to Federal National Mortgage Corp., better known as Fannie Mae. The stock trades on the New York Stock Exchange under the symbol FNM. Fannie Mae provides financial products and services that make it possible for low-, moderate- and middle-income families to buy homes. Fannie Mae is interest-sensitive and, even though it is a stock, it acts like a bond. Fannie Mae usually provides an early warning as to the future direction of interest rates. Our chart this week is of the monthly closes of FNM up to Dec. 2, 1999. I have drawn a long-term trend line from the low in October, 1990, through the December, 1994, low to the recent July low this year. Significant stock-market rallies occur when FNM rebounds from this trendline. The lows of October, 1990, and December, 1994, were excellent times to enter the stock market. FNM is now back down to this trendline, and we need to monitor the stock closely to make sure FNM will once again find support and move to new highs. The mid-1998 and mid-1999 lows are about $60 (U.S.). If FNM were to post a weekly close under $60, the trendline would be violated and I would reduce my equity exposure. The stock market could also ignore rising interest rates and roar ahead, just like the summer of 1987. That was quite a party, before the crash in October. Just remember to leave early.