You are probably right on the TOTAL inversion but I recall focusing on the 10 vs 30 year long before that.
Some more news from the CFZ and MB threads.....
LONG-TERM RETRENCHMENT DERIVED FROM LONG TERM EXCESS
Recessions Caused by Overproduction/Depressions By Overinvestment
Mount Kisco, NY - March 27, 2001 - Present economic currents indicate that the economy has entered a rocky period from which it will not soon emerge, reports the current issue of The Levy Institute Forecast and Macroeconomic Profits Analysis. Eliminating excess capacity and reducing debt to manageable levels will take years. Although the business cycle may rise and fall during this adjustment, conditions will remain generally sluggish.
The Levy Institute Forecasting Center, which publishes the monthly Levy Institute Forecast, cites four phenomena and their interaction as responsible for the developing contraction: the decline in economic activity itself; the negative wealth effects of the deflating stock market bubble; the deterioration of debt quality and credit conditions; and the crumbling of international financial and economic stability.
The publication maintains that despite the stock market’s retrenchment, equity prices are still "sky high". The ratio of market value of corporate equities to corporate gross product reached a stratospheric level during the recent expansion. "While stock prices have come down considerably from their peak, lowering the ratio, it remains high and has much room to fall," maintains The Levy Institute Forecast.
"‘Recession’ is not sufficient to describe the retrenchment process that began late last year. Yes, a recession has begun, but so, too, has a longer process of readjustment, one that will endure for years after the economy begins to expand again."
Additional observations by the Levy Forecasting Center are that profits (national income and product accounts) appear to have declined significantly from the third quarter to the fourth and at best were only slightly higher than a year earlier. Expect first-quarter profits to drop markedly, declining substantially year-over-year. Profits will continue steeply downward for the remainder of 2001.
The Levy Institute Forecasting Center revises its interest rate forecast lower: The federal funds rate is likely to be 3% by December 31, and the yield on 30-year Treasury bonds will fall below 4%. A reversal in this trend is unlikely during 2002.
"The greatest long-term danger may be that interest rate cuts and other actions patch and reinflate the bubble before the ‘contained depression’ has run its course (as in the middle 1990s). The result could be an even larger, more dangerous bubble than in 2000, which would move the U.S. financial situation in the direction of the Japanese dilemma," contends David A. Levy, Director of the Levy Institute Forecasting Center. He adds, "We do not think that a renaissance of the bubble is likely, but it is a possibility."
levyforecast.org
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Tuesday April 10, 8:18 pm Eastern Time
Convergent says notified by Cisco that it is in default
(UPDATE: Adds background, financial details, byline, previous LOS ANGELES)
By Duncan Martell
SAN FRANCISCO, April 10 (Reuters) - Convergent Communications, Inc. (NasdaqSC:CONV - news), a provider of communications services for small- and mid-sized businesses, said on Tuesday that networking giant Cisco Systems Inc. (NasdaqNM:CSCO - news) had notified it that it was in default on a vendor financing agreement.
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Tuesday's news comes four days after the company announced it had gotten word from the Nasdaq SmallCap that it would delist the company's common stock effective April 16. Convergent Communications stock has plunged 99.7 percent from its year-high of $11.82 in April 2000.
Convergent Communications' stock closed Tuesday at $0.03 on Nasdaq, down 1 cent on the day.
It was not immediately clear how much was at stake under the financing agreement or whether Cisco had taken reserves against the Convergent account.
Convergent was not available for further comment and Cisco spokespeople did not immediately return calls seeking comment.
Cisco has come under fire in a number of press reports in the last six months after raising questions about the company's increasing use of its unit Cisco Capital to finance deals.
Amid the scrutiny, San Jose, Calif.-based Cisco subsequently said that increases in its loss reserves were not the result of an increase in doubtful accounts -- those that are unlikely to pay for the products Cisco provided customers.
In its quarterly filing with the Securities and Exchange Commission on March 12, Cisco said: ``We have experienced losses due to customers failing to meet their obligations,'' while adding that ``these losses have not been significant.''
Convergent isn't alone in facing hard times. Many smaller providers of communications services are now strapped for cash because of falling demand and the difficulty in raising additional funding.
On March 29, NorthPoint Communications Inc., a bankrupt high-speed Internet access provider, said its efforts to raise cash were not fruitful and as result would have to shut down its network, leaving as many as 100,000 business customers without Internet access.
But California's Public Utility Commission on March 30 blocked the planned shutdown.
Even so, most analysts don't expect the vendor financing issue to be significant to Cisco, as only a small portion of the company's overall sales are derived from the financing deals.
For the six months ended Jan. 27, 2001, Cisco set aside $52 million for doubtful accounts, compared with $13 million for the preceding six months, according to its quarterly filing.
Cisco's sales for the second quarter of fiscal 2001 ended Jan. 27 were $6.75 billion with reported net income of $874 million, or 12 cents a share, according to the company's earnings news release issued Feb. 6.
Cisco shares added $1.37, or 9.5 percent, to close at $15.86 on the Nasdaq. Cisco stock has declined 79 percent since a year-high of $76 reached April 10, 2000.
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