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

To: mishedlo who wrote (33922)	7/20/2005 4:44:58 PM
From: Chispas	Read Replies (1) \| Respond to of 116555

Caution in the Bond Markets... . (Trader_vic) Jul 20, 15:50 We have a situation growing worse in the bond markets... The 10Yr Treasury is gaining rapidly on the 30Yr Bond... It is now 20 basis points difference and the 5Yr and 30 Yr are only 40 basis points different!!! It looks VERY GOOD THAT THE 10YR WILL CROSS OVER THE 30YR VERY VERY SOON AND WILL SIGNAL THE STANDARD CRY THAT A RECESSION IS AT HAND!!! This is called an inverted yield curve... And I am sure that Alan Greenspan knows this, but he will state to congress that this is normal in this "New Era" of money management... Watch the banks start to announce that they are losing money on their fixed income markets or their derivatives portfolio... This will be most likely from the narrowing of the yield curve where the "Carry Trade" on interest rates are no longer working for them... What used to be a money maker is now a LOSING TRADE... As I said here in the past, I expect 2nd Qtr earnings to be bad and getting worse as time goes on... I also am a firm believer that July 15 of every year is a turning point in the Stock Markets and headed down into November... Notice GM is in hot water, even with their finance arm... I look for GM to be out of business by next June, or severly crippled as a company... Notice Yahoo and their earnings, notice Citigroup and their earnings etc, etc, etc... The strong dollar is taking it's toll on these companies as well... The recent drop in the HUI, in my opinion, was due to options expiration... It had too many long positions for the options writers to cover without huge losses... Many were trading at strike price boundaries... I expect that we will go up from here into a new wave up and a new wave down in the dollar... The dollar is now more of a risk to the economy than a help... Also, technically it is at it's upper resistance of a rising wedge that it broke down from recently... You would have thought that Alan Greenspans speech today would have shot the dollar thru 91, but instead, it lost a whole point in 30 minutes... This is NOT strength in the dollar, this is FEAR from being caught in a dollar collapse... Place your bets, the gambling room is now open... Get gold, keep gold, and prosper... (Vronsky's site)