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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?


To: Demosthenes who wrote (11386)1/23/2000 12:22:00 AM
From: E_K_S  Read Replies (1) | Respond to of 15132
 
Hi Demosthenes : I believe Bob stated that the inverted yield curve should be viewed from the 1 year (or less) rate compared to the 30 year rate. If this is the rule then, we DO NOT have an inverted yield curve at this stage in the cycle! He went on to explain that the treasury is selling 10 year notes (large supply with relative high rate) and no longer is selling 30 year paper ( minimum supply) which may explain the "inverted" yield curve of 30 year vs. 10 year bonds.

However, if the FED continues to raise rates, we want to focus on the relative yield of 1 yr. treasury bonds vs. 30 year or even 10 year yields.

Could Mr. Greenspan be applying the brakes too fast by raising short term rates too much?? Watch the yield spreads between the 30 year or ten year bonds vs the 1 yr treasury notes.

As far as Brinker is concerned ..... no signal yet as to an inverted yield curve.... but keep your eyes open to this leading indicator.

EKS