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Strategies & Market Trends : ahhaha's ahs -- Ignore unavailable to you. Want to Upgrade?

To: SouthFloridaGuy who wrote (2060)	4/18/2001 8:08:51 PM
From: ahhaha	Read Replies (1) \| Respond to of 24758

Could you explain to me why the yield on the 10 year bond has been steadily moving up since mid March? The economy is recovering which means there's a rising demand for loanable funds at the margin. The sensitive T paper picks up these changes first. Also there is a rising risk that FED has overshot on the downside just like they overshot on the upside, kindling a nascent expectation for inflation. Never think inflation is dead. The bond market players don't and they can't afford to think otherwise. Inflation can erupt in two weeks where it took three months in the past before the information revolution got in gear. Does it mean a recession is no longer imminent, or does it mean that money supply is exceeding money demand, or??? Recession is receding whatever hand waiving excuses FED is delivering for this latest move. They've been 100 basis points above the market and so have had plenty of leeway to lower, but they have been cautious and that is prudent. I think they needed to stay the course a little longer, but one shouldn't have these kinds of views because they are just as erroneous as the pretense the FED has when it fixes a rate and makes these changes. Does the fact that the 10 year bond fell today in response to the latest Fed move discount the possibility of another rate cut in May or is it a slap in the face to Greenspan's policies? Neither. You are subscribing to the myths of the financial press. Don't do it. They have no clue whatsoever about how the mechanism works. That isn't surprising given that AG is the only person at FED, where you'd expect the greatest mechanism knowledge, who has expressed a good comprehension, but he's quixotic and not in the way the press explains. Previous Fed governors and chairs are rolling in their graves over overt statements about bailing out the stock market. A chairman can't make any worse assertion about why an action was taken. That's patzer and the more mature money managers won't like it, contrary to the explanation's apparent intent. If you look at a chart of the Eurodollar, T-bill, Note, or indeed, the T bond, you'll see they're all reversing, and depending on maturity, substantially established in their reversals. This is a normal outcome and has nothing to do with rate setting. Those markets are significantly independent of the rates that the FED controls. You should forget completely what the financial press expects the FED will do. That has NOTHING to do with stock price movement. Please don't tell me that that claim can't be true since everyone believes it's true. They've been believing that kind of thing for decades and I haven't seen yet how anyone can use that kind of thing to profit. You would have had to be aboard already to scalp, and the financial press wouldn't have had you long. Two weeks ago the end of the economic world was being pronounced. The bond market stated in late March that things were improving. It was also stated and emphatically so with reasons on this thread by me. No one asked me a thing about it because they had been conditioned by price to act like trained monkeys. That would have given you plenty of time to get long. You would have had to tough it out as the pundits discovered yet another reason why the economy would collapse. That's how you make money. Instead the thread denizens preferred to talk politics, rather than ask me why the market would rise.