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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Lee who wrote (19525)	8/26/1998 3:11:00 AM
From: IQBAL LATIF	Respond to of 50167

Lee-- I agree with you that we will see Bonds moving down as the very reason they are here are not economic fundamentals but fear of deflation which is not created. I see presently a inverted yield curve and according to the herd inverted yield curve does not bode well for the markets, I am also told that CRB index below 200 is a precursor to a bear market, I wish I could convince my self with this logic, whenever Oil or Gold has risen AG has made a point to highlight Gold as a commodity which he looks as an earlier indicator of trouble, so CRB index in a global environment where we have exports constituting a major part of GDP I only see that commodities will help rise the margins it is for this that materials and commodity related companies are really suffering. Right now we have ''created'' a inverted yield curve as a result of security of our wealth this is a gross deviation and in my opinion that hedge funds who are always late entrants in this fixed instrument game will be hurt big time, this external manipulation of yield curve by the so called smartest of the market need to self correct i.e. for the intellectual purity of the market and its longstanding reputation that any external events are washed out very soon. I think we will in few months not help them as GDP number on 27th may show or later numbers that we are not in deflationary scenario, the exodus from the positions will be very severe once this starts. I am shorting Dec contracts as you must have noticed and will continue to do that with a time fram of three months. We may see yields moving back to 5.75 until such time that we start seeing some slow down which would be gradual.