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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 (69086)	8/30/2006 10:08:28 AM
From: Paul Kern	Read Replies (1) \| Respond to of 110194

Fisher used the "S" Word. +++++++++++++++++++++++++++++++++++ *DJ Fed Fisher:Not Worried About Possiblity Of 'Stagflation' 08/30/2006 Dow Jones News Services (Copyright © 2006 Dow Jones & Company, Inc.)

To: John Vosilla who wrote (69086)	8/30/2006 10:14:59 AM
From: Mike Johnston	Read Replies (3) \| Respond to of 110194

Yes, this is a mother of all conundrums. What are bond traders smoking ? The bond market has always been a checking mechanism of bad monetary and fiscal policies. Not anymore. That also explains strength in stock indexes. Stock market likes inflation as long as it does not cause bond yields to rise. Given current inflation 10yr yield should be at 8-10%. Current yields could be justified only if real estate prices somehow are to decline by 70-80% in the next couple of years which i think is very unlikely given proinflationary stance of the fed.