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To: ild who wrote (237164)	4/23/2003 10:59:16 AM
From: Knighty Tin	Respond to of 436258

Ild, excellent stuff. And how can you hate an economist who quotes The Grateful Dead's "Scarlett Begonias" in his newsletter? <g> IMHO, this parrot is dead, but the pet store owner, Alan Da Printer, is still ready to juice up the paddles for another try.

To: ild who wrote (237164)	4/23/2003 11:37:04 AM
From: Perspective	Respond to of 436258

Wow - the yield curve has been a lot steeper than I realized. My assumption was that the curve wasn't nearly as steep as during prior reflationary efforts, but that hasn't been the case at all. Of course, with real short-term rates more negative than they've been in the past two decades, it makes it much harder to stomach the concept of buying the long end of the curve (real bond yields are relatively low), but Reaper has been pretty successful with that play. The steep curve means that the rate carry play is probably continuing in a big way, borrowing short to buy long, nab the spread, helping Greenboink fulfill his goal of making money free at any duration of the curve. Free markets, my ass. With nominal rates getting closer to zero, though, there is a mathematical upside to capital gains in bonds. That upside seems hardly worth the risk that the world suddenly wakes up from its stupor and realizes that the Fed is paying them back in scrips of paper worth a lot less than the ones they loaned them originally. BC

To: ild who wrote (237164)	4/23/2003 1:16:53 PM
From: Perspective	Read Replies (2) \| Respond to of 436258

Refis outnumbered purchases 27:1 at the recent peak! Holy finance bubble! That entire industry is now doing 90-95% of their transactions for entirely non-productive purposes! Take away that refi business, and anyone that's been benefiting from it is going to lose 90% of their business. Jesus, shorting mortgage finance companies with PEs of 6 or 8 doesn't seem so ludicrous now - take away refis and their revenues could decline 90%! Was it GM that just said half their profits came from home mortgages? That's going to just disappear someday soon. BC