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

To: yard_man who wrote (69126)	8/30/2006 4:49:39 PM
From: ild	Read Replies (1) \| Respond to of 110194

Hambone@bond sentiment -- trotsky, 15:16:56 08/30/06 Wed yes, it has become way too bullish. i conclude that the recent rise in bond prices is likely part of a bigger correction that isn't finished yet. one scenario that i have always considered a high probability is that the bond market will actually weaken initially once the Fed starts cutting rates (and they'll be cutting soon in view of recent housing related data, which are nothing short of catastrophic). bond market participants will (rightly) conclude that 'fighting inflation' (as laughable as it is to presume that that's what the Fed is doing) is taking a backseat to part two of the Fed's mandate, which is to 'ensure economic growth and full employment' (an even more ridiculous idea actually - printing money can do neither).