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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: marginmike who wrote (5934)	5/9/2004 6:26:52 PM
From: yard_man	Respond to of 116555

but is that looking in the rearview mirror?? I thought commercials were long bond futures by a wide margin?? Have to admit I haven't check that personally ... When it comes to Eurodollars -- I think clearly, just the increasing perception that there would be a rise in rates has given whoever was positioned for a tightening a great profit already ... I still think AG and co, were trying to fan expectations on short rates in hopes that longer term rates would come back down -- they DON'T want bonds getting killed right now. Instant deflation, that takes commodities to heck -- even from these levels? -- I guess that's possible, but that's not consistent with the number of short rate increases already being priced in. Like Faber pointed out early this year -- everything going up at once -- stocks, commodities, real estate and bonds didn't compute -- on the other side, the same is true (everything going down at once can't persist for long either), except for perhaps a small adjustment period. Thinking more broadly -- perhaps 03 and 04 is all an "adjustment period." Retraces in commodity markets of a large percentage of the initial rise are not uncommon -- in other markets it is not so common -- I want to call the uptick in long rates a temporary fakeout, but if it isn't, in means we are in for a short-lived but awful bout of "hyper-inflation" and then a terrible depression as a result. I'd rather prefer that the Eurodollar markets are currently right about about near term tightness in short rates -- or the expected "effect" -- lower long term rates soon. I think if AG is going to raise short-term rates, it will be at the next oppty. Watch the currency, stock and bond markets to see, IMO. He has taken a bit of wind out of commodities with China's cooperation in the "jawboning", arrested the fall of the dollar a bit, but bonds are still selling off ... he may have to do something more.