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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 (54087)	2/17/2006 12:53:58 PM
From: damainman	Respond to of 110194

Long end rallying more than short end- imo market believes Fed will overshoot and send us into recession.

To: russwinter who wrote (54087)	2/18/2006 10:52:43 AM
From: kris b	Read Replies (1) \| Respond to of 110194

Russ. That's the cognoscenti playbook, but I couldn't disagree more. Spreads and yields are distorted, (see my last post), and therefore do not reflect true risk. We will see a large and potentially historic credit spread blowout, sending all these bond prices, and across all spectrums, dramatically lower (yields higher). A weak economy will amplify that" This is correct. It will be a replay of 1929-1933 when the risk (and lack of liquidity/credit) level returned to normal sending all classes of bonds including treasuries much lower.