Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Hawkmoon who wrote (5381)	1/2/2002 2:41:17 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 33421

>>In fact, mortgage rates seem to have bottomed and are increasing again. Thus, the market is anticipating that the Fed has finished easing and is now back into a tightening mode (hopefully more gradual than before), and factoring in the likelihood that the Fed will be selling T-bills to drain liquity. Given the relatively small amount of T-bills it has to "work with" (due to the small public national debt in the US), when the Fed sells, it's creates ripples in the bond markets.<< That's a very good point. However, if demand for loans is diminishing because business activity is falling, then what would be the point in the Fed raising rates? Ostensibly it is to fight inflation. Where is the inflation coming from?So is it possible that the Bond market anticipating tightening from the FED is getting it wrong? The "recovery" has been pushed out to being in "evidence" from the 1st quarter until the second, and as such the stock market has already run ahead in anticipations of that...even if we get the recovery "as advertised" it can be argued that the S& P is overvalued currently...(I've read by as high as 20%)...also thinking we are reaching a critical juncture as decisions about the direction of the economy becomes more clear in the next month or 2. Rates were very recently at something like 40 year historical lows, so I suppose it would make sense to place your bet rising rates....can't go much lower, right? right? <g>