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To: John Hauser who wrote (47308)	6/12/1998 10:32:00 AM
From: Geoff Nunn	Read Replies (2) \| Respond to of 176387

John, The Wall Street Journal said today that yesterday's events resulted from Asian economic jitters, together with worries about U.S. corporate earnings. It suggests U.S. investors are withdrawing funds from Asian equities, and putting the money into U.S. Treasury bonds. This repatriation of funds back into the U.S. would account for the strength of the dollar. Conventional wisdom holds that a strong dollar means less inflationary pressure in the U.S. While that's debatable, if you buy the argument you should be more willing to hold long term bonds. This could explain why Treasury bond yields fell yesterday, and are now at their lowest point since the gov't began issuing 30-yr fixed maturities in 1997. In evaluating this explanation, its probably wise to reserve some skepticism. One can always construct ex post rationalizations of economic events that sound good. The problem, of course, is that other scenarios can be offered which also fit the same data.