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To: Robert Graham who wrote (40471)	2/6/2000 11:39:00 PM
From: Patrick Slevin	Read Replies (2) \| Respond to of 44573

I recently read that the Fed flooded M3 temporarily and also ran a heavy supply of unusually long term repo which should be coming back out rather soon. If so, wouldn't this constrict dollar liquidity near term? Further inflating Yields and lowering the value of the Long Bond.

To: Robert Graham who wrote (40471)	2/7/2000 10:22:00 AM
From: Tom Trader	Respond to of 44573

Hi Bob, you make some very valid points I was telling someone else on Friday, that the fact that the market was able to brush off the stronger than expected employment data certainly suggests underlying resilience. Regarding the bonds, you are right that the part of the reason for the strength has to do with with the factors that you mentioned. My concern was more to do with reports of heavy losses that were suffered by institutions that were heavily short as the turn occurred. It would not surprise me if there were some large losses -- since the magnitude of the reversal was rather spectacular. Best wishes