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

To: John Vosilla who wrote (36195)	7/16/2005 10:52:45 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

If Interest rates hit 12% percent anytime in the next 5 years I will buy you a steak dinner anywhere you want. In fact, if they hit 7% I will do the same. But if treasuries hit 3% you have to aggree to buy me a steak dinner. Care to bet? PS how about a box of omaha steaks on this instead of a steak dinner. Mish

To: John Vosilla who wrote (36195)	7/16/2005 11:07:55 PM
From: Mike Johnston	Read Replies (3) \| Respond to of 110194

The can't invert that much as it would lead to a global depression.A major slowdown by the American consumer of last resort would be a disaster. The Fed has created the situation where there are only two choices: disaster now or a worse disaster later. IMO whether the curve would invert or not would not be as important, because for some reason long term yields are artificially low. Normally, when the curve inverts, recession follows, but that assumes that inflation rate is lower than long term bond yields and therefore short term yields. Now however, even if the curve inverts, both long and short rates are still below inflation which is stimulative. Of course all this makes sense only if one believes as i do, that a true inflation rate is somewhere between 6-8% and not 2% as maintained by the government and that the bond market is somehow manipulated.