Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Sam who wrote (1577)	5/18/1999 11:07:00 PM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 3536

It implies a couple of things. I suspect that investors have gotten very comfortable with strong equity markets. This has raised their expectations of returns. They are not looking at bond yields as a safe return over inflation. They are comparing them to equity yields, I think. So as the percieved equity risk declines, their yield requirement rises. Also the strong economy has generated significant borrowing demand which has meant a lot of additional supply. And finally, the war in Kosovo may be having an impact in two ways. First it is clear there will need to be a significant increase in defense spending. This opens a question of how much impact their will be on the budget balance. Also in most of Asia this action is not overly popular. This is giving some foreign investors a negative spin on the US at the moment.