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Gold/Mining/Energy : Gold Price Monitor -- Ignore unavailable to you. Want to Upgrade?

To: Bobby Yellin who wrote (4598)	12/21/1997 8:20:00 PM
From: Gabriela Neri	Respond to of 116822

I have two things to say: 1. If the long bond is going much lower(lower enough to care about), then it cant do so without the fed lowering rates. 2. If the long bond does go much lower, I would be willing to bet that it first must wash out the weak hands and go up(in yield terms) first, in order to be able to go down substantially from here. My main point is that the long bond going much lower from here is a bet on the fed lowering the fed funds rate. I dont think that will happen so fast unless there is a liquidity crisis brought on by a crash scenario in the stock market(not improbable, but not highly likely, maybe just a possibility) or a banking failure of big proportions(not so unlikely given the situation in Asia). Of course, aligned against a fed rate cut is a domestic economy at capacity constraints with wage rates increasing and unemployment at historical lows. We know that Alan Greenspan is not the guy to count on to try to prevent the market from letting out a little air. He wants the stock market to cool off, however, he wants it to do this in a non crash way. We will see if he gets his wish. I bet you he is so worried about the stock market that it affects his sex life with Andrea Mitchell. Hey, its a tough job but someone has to do it.