Bond market heads South! : LUSENET : TimeBomb 2000 (Y2000) : One Thread

Most of you don't follow interest rates on a daily basis, I do. Today (and this week) has been an interesting one. Greenspan mentions possible inflation and boom the markets have crashed. We had a .25% move in 30 yr. fixed rate mortgages today! About a .50% move in the past two weeks. It won't take to much in the way of bad news to send the stock market crashing, if the move in bonds this past few days is any indication.

Got Cash?

-- Bill (, February 25, 1999


We'll see. 50 basis points in a short time may seem like a lot, and this could just be the beginning of a sustained move, or it could just be the equity markets factoring in a goodbye to the Fed's easing/neutrality bias. I haven't seen the yield curve recently though. Still have a way to go for the long bond to be thought 'competitive' to the U.S. equity markets. What do you think?

-- Rob Michaels (, February 25, 1999.

5% may look pretty good this year compared to the ?% or -?% return in the equity markets. Who will buy any stock or bond, if a depression looks likely?

Me, I am long toilet paper, rice and 00 buckshot. Time will tell.

-- Bill (, February 25, 1999.

LOL.Good point. Watch the 90 day T-bill, time will tell.

-- Rob Michaels (, February 25, 1999.

Silver Eagles have busted out from $7.35 each in November to a quote I got today at $10.50 each. Silver Maple Leafs are next to move as you cant get Eagles right now. They have a backlog of 2,000,000 peices. They shipped almost 2 million out in January and have only shipped 150,000 this month which proves the shortage rumors on silver blanks. Stats can be found at U.S. Mint. 1/10 oz Gold Eagles went up yesterday $4.20 each. Anyone that does not see the breakout in precious metals and PM Stocks coming has to be blind. If you would of had 5000 pcs of silver eagles on Monday you would have made $15,000.00 this week. $36,750.00 turned into $52,500.00 to four days.

Braz il in recession but worse to come

German And French in decline

Brazil is toast

Money For nothing

May GODS Will Be Done


-- flierdude (, February 25, 1999.

I don't think this decline is sufficiently severe to cause a mass panic. There will be something FAR WORSE which causes the mass panic. I hope whatever it is doesn't happen for MANY months. Arrgghh! Do we need this stress?

Meanwhile, prepare and stock up according to your abilities. Whatever you do NOW will help others. :)

-- dinosaur (, February 26, 1999.

I agree dinosuar. No way this is it - heck, the DJIA closed virtually unchanged for the week. Besides, people have learned to buy dips, (dips buying), and they think the market will just go back up. They have learned thier lesson well, prodded by the so-called conventional wisdom. An old adage on the Street is that when people learn their lesson, it is always the wrong lesson.

Folks learned back in 1987 that a market can go down 20% and rebound quickly. Same for the shallow recession and correction of 1991. And more recently, the correction of October 1997 and correction of last summer. All quick rebounds, That has been the lesson.

The thing that will make what's coming up dirfferent is there will not be a quick rebound, and the bottom will be much deeper. We are talking grizzly here. Many folks will ride the elevator to the basement floor. Even without Y2K the global markets are going to have to work out these 'dislocations' and speculative, manic, bubbles. Just my opinion as always.

-- Rob Michaels (, February 26, 1999.

If the rise is bond rates is due to repatriations by the Japanese, we could be in for big trouble. The poor response to a Treasury auction this week set off the bond troubles. The Japanese may need the repatriated money to bail out their banks.

-- Incredulous (, February 26, 1999.

Incredulous: Yeah, you are right - the question is when though. This weeks move was supposedly due to the Humphrey/Hawkins testimony by AG and the subsequent concerns for a change towards raising rates due to the potential for inflation to heat up.

Japan is the worlds second largest economy and they hold a huge amount of U.S. debt, so there is, and has been for years, the questions regarding when the flow reverses. With their long bond around 1.5% last I looked, even a T-Bill looks attractive.

BTW, wasn't silver wonderful this week? Wonder if Buffett is still holdiing.

-- Rob Michaels (, February 26, 1999.

Moderation questions? read the FAQ