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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 (68350)	8/16/2006 8:52:09 AM
From: Mike Johnston	Read Replies (2) \| Respond to of 110194

Notice we haven't had a period of prolonged inversion in the curve in 25 years. But we have never had a period except the last few years, where entire yield curve was below the rate of inflation. So i think, one cannot look at this inversion from the perspective of the past, we are in uncharted territory. I think what the Fed will attempt to do is to engineer a temporary but sharp drop in long term yields, to allow millions of homeowners with resetting ARM's a chance to refinance perhaps with fixed rates as low as 5-5.25%.