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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Bid Buster who wrote (253965)	8/5/2003 8:55:02 AM
From: Tom Smith	Respond to of 436258

dailyreckoning.com "We thought it was impossible...for how could an economy go in two contradictory directions at once? And yet, that seems to be what is happening. In a deflationary slump, yield spreads widen while the best credits rise in value as interest rates fall. In other words, investors are happy to accept lower yields in a world of falling prices, but worry about poor credit risks going broke. But in an inflationary slump, interest rates rise along with yields, across the length and breadth of the yield curve. Investors don't worry about companies going bust as much as they worry about the value of the dollars they get back. Currently, to the great puzzlement of investors, commentators and economists, we have rising yields, generally, and widening spreads at the same time! It is "the ultimate vicious cycle," says Stephen Roach. Rising rates not only destroy the economy...they also destroy people who owe money, while falling prices destroy business profits (what's left of them) and jobs. Could it be, dear reader? Could the U.S. be facing neither Japan nor Argentina, squarely, but the worst of both possible worlds...sushi with salsa...kabuki to a tango beat?" Will the worldwide notional value of derivatives exceed 1000T or approach zero by 2010?....scared shitless minds want to know...