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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (10962)	12/5/1997 6:34:00 PM
From: Hawk	Respond to of 94695

GZ I agree, Greenspan has to lower the discount rate to allow the long bond to go lower than 6%. Long bond can't go lower till he does. Marc

To: GROUND ZERO™ who wrote (10962)	12/5/1997 6:35:00 PM
From: Lazarus_Long	Read Replies (3) \| Respond to of 94695

<< Have you ever seen such a narrow spread between one month and 30 years? >> Yeah, but not in a while. The long-term rate can actually be less that the short-term rate. It's called an inverted yeild curve and is generally regarded as TROUBLE. I believe (but I'm not sure and don't have references here) that the last time this happened was back in the '70s.

To: GROUND ZERO™ who wrote (10962)	12/5/1997 6:39:00 PM
From: Defrocked	Read Replies (2) \| Respond to of 94695

GZ, keep your eye on the 3Mo/10Yr. spread. This is the most popular indicator at the Fed for yield curve inversions and a recession forecast tool. Today's spread action along Treasury curve was, I agree, very interesting. BTW, NY Fed Web site has two papers you might be interested in, one on the aforementioned spread and another on Head-and-Shoulders patterns in currency markets. Current Issues in Economics and Finance Jun-96 Volume 2, Number 7 The Yield Curve as a Predictor of U.S. Recessions Arturo Estrella and Frederic S. Mishkin Staff Reports Aug-95 Number 4 Head and Shoulders: Not Just a Flaky Pattern C.L. Osler