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

To: GraceZ who wrote (9252)	7/14/2004 2:50:54 PM
From: Haim R. Branisteanu	Respond to of 116555

Lew Ranieri still alive - Ranieri: U.S. growth is slowing 14.7.2004 \| Lew Ranieri, the master investor and a major shareholder in Israel’s Bank Hapoalim, estimates that America’s economic growth is a lot slower than the consensus believes. That means interets on the dollar will be rising more moderately than is generally expected. In an interview with TheMarker, Ranieri, who invented the massively popular vehicle of mortgage-backed bonds, estimated that interest on the greenback will rise to 2% during the first quarter of 2005. But he doesn’t see it rising much father afterward. “I would be glad to be proved wrong,” Ranieri said, but said he believes economic growth in the United States has all but halted. Pursuant to that evaluation, Ranieri said that soon a window of opportunity will be opening to buy long-term American bonds. They will turn attractive when the market realizes that the spurt of economic growth has ended. Ranieri is not recommending a blanket investment in long-term paper: some bond prices have become bloated, he warns. Credit spreads between corporate and American government bonds are too narrow, he cautions, mainly in regard to the junk bonds put out by less-stable companies. The low interest rates in the U.S. and elsewhere have created a hunger for returns, Ranieri explains, leading people to succumb to the temptation of buying inferior products. In some areas, yields sank to artificial levels, mainly among high-yield instruments. But, he added, we all have short memories.