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Politics : Al Gore vs George Bush: the moderate's perspective -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (5381)	11/10/2000 10:39:43 AM
From: pezz	Read Replies (1) \| Respond to of 10042

<<the yield curve on 30 year notes has been inverted for some time now, primarily on anticipation of the govt buying back longer term paper>> Yeah ......so??..... How is this gonna increase the value of the dollar?? <<If I'm a big financial bond player out there and I know that every year there will be $200 Billion in money flow from government repurchases of 30 year notes, which almost GUARANTEE that I'll make a profit on holding those notes, why would I want to purchase riskier corporate bonds, even if they pay a higher rate?>> All it means is that the government planned purchases are of course priced into the market......If you think that anything is "GUARANTEED" in the markets you are indeed naive! The more that Bond traders buy the lower rates go down reducing incentive to buy [equlibruim is quickly found] and making corporates more attractive. Bond traders know this so they only bid up prices to a point were the government purchases are priced into the market...... <<I'll buy the 30 year notes, wait for the govt to make a big for them, and then use the proceeds to buy even more of them back on any weakness>> Your scenario that all one must do is buy and wait for the government to bid is way to simplistic.........Ever see a stock run up prior to earnings then tank on the expected good report? ..You don't believe that? Try it.Making money is never that easy. <<it distorts the markets, the dollar, and puts additional pressure on foreign currencies.>> You keep saying this ! And I keep asking you to explain the mechanics behind such nonsense.......You never do. In my last post I explained why you are wrong you haven't addressed my explanation.....I ain't gonna repeat it for you! Why not just admit that you are in over your head here and get back to politics?