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To: reaper who wrote (225184)	3/4/2003 10:55:22 AM
From: Perspective	Read Replies (1) \| Respond to of 436258

Your capital gains in bonds should be about done, mathematically. While people consider the impact of a 0.5% rate drop to be much more significant when rates are 4% than when they are 8%, the capital gains function is based strictly upon duration and absolute rate change, if I'm doing the math right: when rate on 10yr goes 10% -> 9% = 11.7% cap gain when rate on 10yr goes 4% -> 3% = 10.9% cap gain Pretty much equal. The effect of equity creation through marking down yields is running out, which has major implications for liquidity. If rates really do get sticky around zero, there's a finite amount of equity and liquidity that can be created in existing debt by lowering rates to zero. The max capital gain that can be created is by taking rates all the way to zero. BC