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

To: Bonnie Bear who wrote (49016)	2/26/1999 1:20:00 AM
From: Peter Singleton	Respond to of 132070

Oh, I see, Bonnie. You were pointing out the spreads between the long bond and other longer term debt instruments continue to be unusually wide ... and you may have been inferring that to return to equilibrium in current conditions, the long bond should go up to 6% (of course this assumes other debt in the index wouldn't go up at the same time, and sets aside the impact of the long bond change on the index itself). I don't know enough about the debt market to have much of an opinion, but I think the continuing wide spread between treasuries and everything else is a big red flag, especially considering the agencies have been printing new debt like a fire hydrant that's been backed into by a truck. Plus, it has a very real economic impact, since everybody else who's got to have real credit has a higher cost of funds than the guys who get to print the bucks to pay off their credit cards. Even with as little as I know about the debt market, I'm watching it closely. I think that's where the the cracks are going to show on the face of the dam. Peter