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To: Gersh Avery who wrote (55177)	10/10/1998 1:55:00 PM
From: Lee	Read Replies (2) \| Respond to of 58727

Hi Gersh,..Re:this bond/fund stuff is strange. Yeah, it's really funny that supposedly short covering and flight to quality ran bonds all the way up to 135 from around 127 just a few weeks ago. Not buying into many of the stories going around. I think it has a lot to do with $/yen instability. As long as the dollar was strong, treasuries were a good place to store funds, but once the funds started selling dollar and buying yen, the whole equation got out of whack. Rumor is that the Tiger fund lost $2b in being short yen. That's a huge number of contracts, (each contract = $12,500). It's not often remembered that bond health is dependent also on dollar health. The bond market is the most liquid market* globally after the Eurodollar so it doesn't make sense to sell bonds to raise cash unless someone has to sell to pay off margin calls on currency transactions or unless the whole equilibrium setup is significantly altered. JMHO Lee * There's usually a chart in Futures magazine monthly which shows different market liquidity and I can't remember if bonds are 2nd or 3rd, SP might be 2nd.