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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (11522)	4/8/2004 2:45:13 PM
From: NOW	Respond to of 110194

oil correlated with bonds as reflecting increased liquidity?

To: ild who wrote (11522)	4/8/2004 3:03:16 PM
From: ild	Read Replies (1) \| Respond to of 110194

Date: Thu Apr 08 2004 14:53 trotsky (Earl Grey@Grant) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved as much as i respect and like Grant, and his fellow bond bear Bill Gross, i'd like to point out that he's wrong on at least one point: the reward of bond bulls for being right is not likely to be 'modest'. in a deflationary K winter, the 5% nominal yield could turn out to be huge...if e.g. the 10 year note yield were to fall to the same level the JGB yield has reached ( about 0.8% ) , the capital gain alone would be on the order of 40% or so - interest income not counted. in bonds, that's not exactly a 'modest' return. i'm quite surprised actually that the old 1970's mindset ( which demands that when commodity prices rise, bond yields 'must' rise too ) is still so prevalent, after a 3 or 4 year long market demonstration to the contrary. Date: Thu Apr 08 2004 14:01 trotsky (kapex@Ian Gordon) ID#377387: Copyright © 2002 trotsky/Kitco Inc. All rights reserved well, Gordon is without a doubt correct that 1. the deflationary K winter is imminent, and 2. that even if governments attempt to manipulate the gold price, they will fail in this endeavor just as they always have. as i always say, NO-ONE is bigger than the market, not the treasury, not the Fed, no-one. therefore i hold with Gordon that the manipulation issue ( which relies solely on circumstantial evidence anyway ) isn't worth getting exercised over.