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

To: BGR who wrote (77211)	3/8/2000 12:15:00 PM
From: Michael Bakunin	Read Replies (2) \| Respond to of 132070

I'm befuddled. It seems likely that there was a sudden realization among market participants that the 30-year might be getting a wee bit scarce, and that the resulting move was exacerbated by the unwinding of various strategies that had relied on shorting that bond. However, I don't think that alone can explain the current inversion. On 12/31/99, the curve was still upwards-sloping. Over the intervening weeks, the short end of the curve has been pummelled (there's a 'hump' around 2-5 years), while the long end has been bought. The inversion is steepest from 5 to 10 years -- and since nobody's arguing the 10-year will be getting scarce, I think the hump/inversion comes from something else. I'm still puzzling over what, though. -mb