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.

Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: Teresa Lo who wrote (6066)	3/15/2001 9:04:15 AM
From: horsegirl48	Read Replies (1) \| Respond to of 8925

Teresa I have corporate bonds that have been doing great, what you wrote, since I really respect you has shaken me up, would you suggest sell them and go to a money market??? hg48

To: Teresa Lo who wrote (6066)	3/15/2001 9:15:27 AM
From: Jill	Read Replies (2) \| Respond to of 8925

Whoops! I just read this on your yahoo groups and didn't realized it was posted here. Teresa, dumb question: I don't understand how injecting liquidity i.e. printing money actually works. It makes no sense to me. There's only more paper. I know Greenie did that before Y2K also. I know it helped fuel the bubble. But it seems like an emperor's new clothes mirage. How does it actually impact the underlying economy, bonds, stocks etc. You say it leads to inflation? So what would an investor (if someone likes to partly invest, partly trade) do at this point? Also, I do think there's one tiny miscalculation in your scenario, and its boomer psychology. I don't think boomers will retire. They may do what you're doing--i.e. they may work part-time, consult, or whatever, but they will keep working.

To: Teresa Lo who wrote (6066)	3/15/2001 10:05:32 AM
From: JD	Read Replies (1) \| Respond to of 8925

Remember, credit bubble excess capital always flows to the asset class which is inflating the fastest...looks to me like a lot has been going into real estate - a very illiquid asset class in which there is much less chance of inflationary pressures (as opposed to financial assets). I had been expecting an inflationary pop (because of energy costs) and then long term deflationary bear market for most of the rest of this decade (global business cycle contraction)....now wondering how much inflation we will actually see. Much more evidence of a trend toward deflation on commodity charts than inflation for now. I have the opinion that our central bank reacts to any crisis the same way, by throwing money at it...but the recent credit bubble was created by the commercial banks, brokers & GSE's ability and desire to create loans...and recently we have heard the chairman 'cheerleading' the banks to go ahead and keep creating loans, but to no avail. Jerry

To: Teresa Lo who wrote (6066)	3/15/2001 10:35:15 AM
From: Teresa Lo	Read Replies (1) \| Respond to of 8925

<font color=blue>2001 MAR 15 Morning Update: The S&P and NASDAQ futures open up on a gap. There is resistance from several points and if it is going to go up, we need a thrust up shortly. The ND futures are testing yesterday's high here, and also the low from March 1. Note on the 45-minute chart here, it is on a retracement after a breakout to the upside after a a triangle consolidation: ottographs.com The SP has bounced up to resistance from several points as well, and note on the 45-minute chart, a "descending" triangle did the typical fakeout thing by going UP! We are on a retracement now after the break to the upside, and it would be good for the market to find some buyers here and take it up and over immediate resistance provided by the 20EMA from this timeframe. ottographs.com Teresa

To: Teresa Lo who wrote (6066)	3/17/2001 11:28:53 AM
From: Not_Active	Read Replies (3) \| Respond to of 8925

If you subscribe to the "print the money and inflation will come" hypothesis, then one alternative to preserve wealth, particularly that tied up in tax-deferred retirement accounts, is the use of Treasury Inflation Protected bonds (TIPs) or one of the TIPs oriented bond funds run by the big families (Vanguard, American Century, TIAA-CREF, etc). These bond instruments are relatively new (since 1997) and somewhat unorthodox, in that the principle value of the bond is adjusted as inflation changes over time. The higher inflation is, the better TIPs are as an investment relative to regular treasuries. I believe the break even at the moment is around 2% inflation rate, so its not hard to envision a scenario where TIPs could be very popular. This leads to the second potential advantage of TIPS right now in the secondary market -- TIPs are infrequently issued and in small amounts, so that the total debt issued in TIPs is puny compared to the overall gov't market. Thus, there is likely scope for premium pricing based on inflation expectations, not just current inflation (and thus current yield). Perhaps that explains why the total return of many TIP oriented funds was north of 12% last year, and to date this year is exceeding 20% on an annualized basis. Below are some informative links: Good overview of these instruments fool.com Specs of the instruments publicdebt.treas.gov Tax treatment of TIPs ftp://208.131.225.4/gsrintax.pdf