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

To: russwinter who wrote (12461)	4/22/2004 5:19:25 PM
From: gregor_us	Read Replies (1) \| Respond to of 110194

We've Just Witnessed a Two Week Fed Road Show, Russ. This was a concerted and brilliant sales effort. Key was being careful not to insult the intelligence of the audience--too egregiously. And they accomplished that. As a result, their ipo "Bond Investors Protection Program" Nasdaq: BIPP, was a tad undersubscribed last week--but damn if their top salesman, a one Alan Greenspan, didn't place all of the supply by Thursday afternoon. (The brilliant Pavlovian touch was the Tuesday/Wednesday fear+relief dynamic which Salesman Greenspan enacted--and carried off with a flourish). Impressive stuff.

To: russwinter who wrote (12461)	4/22/2004 5:54:40 PM
From: ild	Read Replies (1) \| Respond to of 110194

By Lynn Adler NEW YORK, April 22 (Reuters) - U.S. agency yield spreads narrowed over firm Treasuries on short-covering on Thursday, as players clung to hopes that the Federal Reserve is not poised to raise interest rates immediately. This outlook was supported by Federal Reserve Chairman Alan Greenspan's comments on Wednesday suggesting inflation was not enough of a force to push the Fed to swiftly boost interest rates. Recent robust economic data had raised worries of a Fed rate hike from 1958 lows as soon as June. "Shorts are throwing in the towel and covering," said Andy Brenner, head of institutional fixed income at Investec US. "Greenspan's commentary in front of the Joint Economic Committee (on Wednesday) shows the Fed will move interest rates very slowly. The next major catalyst for a downward move is not until the May 7 unemployment numbers." Agency yield spreads over Treasuries narrowed by as much as 1.5 basis points on Thursday, after widening by 1 basis point on average last session. U.S. Treasury Secretary John Snow reiterated on Thursday that that the agencies' continued growth could pose a threat to the financial system. "There are clear systemic risks in the continued growth of entities this large relative to the whole financial system," Snow said in a question-and-answer session here at the annual meeting of the Bond Market Association. Snow's comments on the GSEs, Brenner said, had no market effect. Freddie Mac's Chief Executive Richard Syron, also speaking at the BMA meeting, said he sees slim chance of a regulatory overhaul this year for government-sponsored enterprises Freddie, Fannie Mae and the Federal Home Loan Banks. "The chance of a GSE bill this year is quite low," he said, adding "this is next year's issue." Freddie Mac also reported on Thursday that its investment portfolio shrank for the fifth straight month because mortgage purchases have been costly. "Right now the purchases aren't attractive to us and do not meet our thresholds," said Heather Sieber, a company spokeswoman. As a result, the agencies have had less need to issue new agency debt to finance portfolio purchases, supporting spreads in the secondary market. Benchmark 10-year Treasury notes <US10YT=RR> rose 13/32 in price, reducing the yield to 4.38 percent from 4.43 percent late on Wednesday.