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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: dennis michael patterson who wrote (19298)	9/19/2001 10:58:31 AM
From: JRI	Read Replies (1) \| Respond to of 52237

DMP- "They" are still controlling the selling....for "their" benefit...J3P is still putting in his/her last buy order.... Sure we are due for a bounce, but, just as possible, we could see a waterfall event here.. Scary times indeed, all the way around..

To: dennis michael patterson who wrote (19298)	9/19/2001 1:08:12 PM
From: Challo Jeregy	Read Replies (1) \| Respond to of 52237

from Bill Gross - Yield Curve Changes Alert Bond Managers Pimco’s Gross says he will start to sell most short-term debt holdings By Claire Mencke Investor's Business Daily A picture can be worth a thousand words. For folks who watch interest rates, the most telling graphic lately has been the yield curve. That’s the picture of how high long-term interest rates are vs. short-term rates. Lately, this curve has been a steep hill. It ran sharply upward from short to long rates before last week’s terrorist attacks. After that, the curve got steeper yet — as short-term rates dropped. Image: Too Steep? Long and short rates rise and fall for a number of reasons. What forces are driving the yield curve now? Mostly, short rates have been dropping because the Federal Reserve has been cutting the short fed funds rate to help the stalled economy expand. As rates drop, the theory goes, firms and people who need to borrow can do so more easily. Then they can spend more, and the economy benefits. Safe Havens Shorter-debt issues have attracted the most interest lately. Investors pouring out of stocks and stock funds have piled into these safe issues that don’t tie up money too long. At least one big institutional investor thinks this trend has gone about as far as it can. Bill Gross, head of bond investing at $220 billion Pimco Funds, said Monday he would be selling “the bulk of our short-dated maturities over the next few days.” That move will help put Pimco in a more neutral position in the bond market, he says. “The bond market reopened Thursday with a stunning, although not unexpected, rally,” said Gross. “Such rallies call into question the sustainability of prices and yields that may reflect more fear than common sense.” At their current level around 2.93%, two-year Treasury note yields “can only be justified if the Federal Reserve drops (the fed funds rate) to the vicinity of 2%,” Gross said. That’s 100 basis points away — still a much larger move by the Fed than anyone expects. When short rates drop, long rates may stay about where they were. If they are unchanged, the difference between long- and short-term rates increases. Then the yield curve steepens. And the spread, or difference, between long and short rates widens. That might happen if market players think the stimulus of a rate cut will take effect promptly. We’ve already had a lot of rate cuts this year — eight in all. Even after Monday’s 50 basis-point cut, it’s widely expected that the Fed will lower rates again at its next meeting on Oct. 2. When markets expect a lot of economic stimulus, the curve can get even steeper — as it is doing now. “The (30-year) bond yield may rise as Congress responds with emergency spending,” said Ed Yardeni, Deutsche Banc Alex. Brown’s chief investment strategist. The upshot? “The yield curve spread is widening, which is a leading indicator of economic growth,” Yardeni said. “While the crisis might push the economy deeper into a recession the rest of the year, it might be stimulative next year.” Spending Plans The crisis also forces leaders to plan spending that was unthinkable before. “One concern in recent weeks was that congressional arguments over deficits and Social Security funds would curtail government spending or tax programs that could, if rapidly enacted, support the economy,” said Standard & Poor’s chief investment strategist David Blitzer. “A budget deficit in fiscal 2002 is more likely.” Analysts also see a rise in defense spending. The budget surplus “certainly would shrink significantly as defense spending rose,” Yardeni said. Government debt would no longer shrink. In fact, it could expand. This is bearish for long-term bond investors. Some are shifting out of longer maturities, too, heading for the safer ground of intermediate-term debt. “We intend to give portfolios a rest,” Gross said. He’ll wait before returning to the market. “The next few weeks should afford ample opportunities to take risk in corporate, emerging and even high-yield bonds if the markets trade down to bargain levels,” he said.

To: dennis michael patterson who wrote (19298)	9/19/2001 1:12:33 PM
From: Jan Crawley	Read Replies (1) \| Respond to of 52237

This dribbling is boring, and unprofitable Hi Dennis, I am up pretty nicely in my trading a/cs this year and the trading pot is 98% cash. But my L-T investments(Vanguard-windsorII, wellington..etc) was down 8% ytd as of yesterday...and more today..and probably more in the coming weeks. The Vanguard portfolio is much larger than the trading port so I am flat at best for this year right now. The Vanguard part had a 5% ytd gain as of 7/31/01. Most of the loss occurred within the past 10 days.