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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Smart_Money who wrote (50559)	4/12/2002 2:05:19 AM
From: thestockrider	Respond to of 99280

>>Has anyone heard of Dr. Weiss. He is predicting IBM to default on 35 Billion in debt. Says the same about NXTL. His theory is deflation will bury debt ridden companies. Can you think of an argument against pervasive, significant deflation? What did you just mention? Besides, Bill Gross just wrote an oversimple Investment Opinion on why short term interest rates will stay low: for companies like IBM that borrow using short-term rates. Companies with fat margins like credit card companies, companies with power to raise prices with inflation, and companies with gamblers as CFO's will choose short-term debt. IMO short term rates will stay low to improve corporate america's profitability. The longer short-term rates stay low, more CFOs will choose short-term indices for company debt. This will increase default risk associated with rising interest rates.