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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (5113)	11/16/2001 4:56:25 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 33421

you're on the same page as me. That's what I thought, but it doesn't hurt to make sure... :0) So we can expect US T-bill to fall in yield as oil declines.. Or can we? There's the issue about the additional stimulus from decreasing oil prices (great for the transports and consumers), so we're gettting mixed signals about where our economic future lies and where to allocate assets. So theoretically speaking, the markets were selling treasuries and reallocating to equities in anticipation of an economic recovery (plus all the cash that has been built up on the sidelines looking for a home). But all of a sudden oil prices crash, creating the false belief that economic growth will be substantially lower, rather than it representing the breakdown of artificial price supports by OPEC producers (their $20-25/barrel "trading bands" were unsupportable given global economic stagnation). So bond prices yields went up as money went to equities, but now they don't know what to do... follow through with their normal sympathetic moves associated with oil prices, or start factoring in economic overstimulation and the fear of inflation and the end of Fed interest cuts (and the potential need to hike interest rates within the next couple of months).. How's that analysis? Hawk