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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: chowder who wrote (10189)	11/2/2001 1:54:46 PM
From: chowder	Respond to of 23153

I understand that the bond market is what is driving this recent rally. Bond yields have dropped dramatically and have helped to provide a shot in the arm for the stock market and is supposed to provide a stimulus to the economy, the same way a rate cut is supposed to stimulate. As bonds and other paper assets come down with yields, it no longer provides the security of outpacing inflation. Someone is forcing these people to take more risk and place that money into equities. A monthly chart of the ten year bond shows it hitting its lows of 1998. stockcharts.com[h,a]maclynmy[pb20!b10!f][iut!Ub14!Ua12,26,9!Lh14,3] The magic ingredient in motivating yourself and others is HOPE. Our policy makers and those that manipulate, I mean run, the market know this better than anyone. A $100 billion spending package has been approved by Congress and continued interest rate deductions have provided hope that the economy will turn around next year. Lower energy prices are hopeful of stimulating more demand from business. Home refinancing is still on a tear as people are locking in their equity and it is hopeful that they will spend most, if not all of it. Decision makers have been spoon feeding us the bad news over the past year. They continue to do so. It is their wish, in my opinion, to keep providing that hope until the economy can turn on its own. I suppose its their way of doing damage control. The longer they drag this out, the less the chance of us retesting our previous lows. It could be that decision makers are hopeful that once consumer confidence kicks in, provided it does, people will gladly pay for overvalued stocks again and they can unload their stocks on us. I read that in 14 of the last 15 market bottoms since 1950, a retest of those lows after the initial bounce occurred before the market resumed its upward trend. Only in 1982 did we see a V-shaped recovery. Hehehe, it would be just like this market to pull a stunt like that again just to get back at us individual investors who shun the advice of the all-knowing. It shouldn't matter either way for those who have funds left to take advantage of either scenario. I think it's time for a nap. dabum