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To: KyrosL who wrote (88325)	3/24/2010 3:46:46 PM
From: Keith Feral	Read Replies (1) \| Respond to of 118717

Investors deserve more than 3.6% for 10 year bonds coming out of a recession. Higher rates are bullish for the dollar and banks. Mildly negative for energy and materials. One big catalyst for bank earnings this year may be the use of accounting changes that the homebuilders used in the 4th quarter. JPM is trying to line up a $1.4 billion tax refund, and I'm sure that BAC and Citi will try to follow suit. finance.yahoo.com On a risk level though, the market has topped out each time Treasury yields have managed to push up to 3.8%. Is this time different? I don't really see Treasury yields falling below 3.8% for the next couple years, so I think that rising bond yields can continue to support the market for a long time.

To: KyrosL who wrote (88325)	3/24/2010 4:27:39 PM
From: Keith Feral	Read Replies (1) \| Respond to of 118717

Gross favors stocks over bonds (by which I guess he means Tresury bonds), as a result of higher deficits. cnbc.com Whatever the logic behind his arguement, the only thing that is certain is higher interest rates and a stronger dollar. I think that banks will be able to buy all of the Treasuries at gradually higher yields over the next couple of years. That's why I think the restrictions about prop trading are never going to become much of a reality this year. I heard a second call today for the US dollar to rally to 1.20 against the Euro. Makes all the sense in the world that the dollar will continue to outperform the Euro, where real estate prices are off the charts. They may have fixed their banking system for now, but the problems in real estate are getting bigger while they continue to shrink in the US.