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

To: Cabo Eddy who wrote (45689)	2/4/1999 11:20:00 AM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

Cabo, The yen carry trade is certainly a vegetable if it's not dead. However, we have to remember that the long bond is not the place where this impact first shows up. The Fed can scam long bond prices by buying them with newly printed cash, bloating the money supply. And, that is exactly what they are doing and have been doing for months. Where the impact is felt first is in corporates and munis, then in mortgages. Corporates and muni spreads are wide and getting wider. Eventually, I think it will take an 8 1/2% long bond to wring the excesses and imbalances out of the stock market. And I think we'll get it. But I think dissing corporates and munis makes more sense in the short run. MB