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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Joan Osland Graffius who wrote (25047)	1/5/1998 3:42:00 PM
From: Knighty Tin	Respond to of 132070

Joan, I think he will eventually lower rates before the yield curve turns negative on him. Alan simply does not understand the impact of runaway financial inflation in a country that has a low savings rate. He keeps looking at the price of pcs (one of which rarely works -g-) for his key to inflation. He ought to look at Dell stock. I have changed my mind on the bonds, at least for now. Maybe it is all the profits I made on my long bond calls in my income 90/10. But it looks like pricing power is gone from the economy and bond yields look good on a nominal inflation basis. However, I recommend holding T-bills and buying bond calls for the position. Don't take the risk that people eventually figure out this emperor is naked and kill bonds. It is much better to lose a call premium than have a bond collapse under you. Also, look at some of the limited term CEFs with govts and big discounts. The managers have, for the most part, been jackasses, but that is reflected in the discounts. As long as you have an exit date, which means they own some AAA zeroes, your principal is fairly safe. I recommend Nations 2003 and 2004. MB