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Strategies & Market Trends : January Effect 2003 -- Ignore unavailable to you. Want to Upgrade?

To: RockyBalboa who wrote (92)	1/6/2003 10:51:06 PM
From: Londo	Read Replies (1) \| Respond to of 666

I'll agree with what you said except the following: -a coming iraq or north korean war should send up stocks and so more money might come out of the bond side Really depends on what happens. Personally, I think it's going to be quick and painless (in Iraq). Taking a couple comparisons of extreme events: After 9/11, yields on the 30 year immediately went nowhere (as stocks weren't trading), but when the S&P got trading again, bonds sold off about 0.2% before they were bought again. In that case, the market clearly was dumping both classes of securities (presumably insurance funds selling off equity and bonds to pay off for claims). Desert Storm, January 1991: Bonds flucuated between 8.4% and 8.1% during December 1990, and made their way up to 8.4% again when the January 15th deadline approached. On January 16th, they announced that they invaded Kuwait, and then the next day, bonds traded at 8.2% for the rest of the month. I'd suspect this time around that bonds would get bought into a war, and sold afterwards.