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#1 nimblebear

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Posted 16 February 2007 - 07:17 PM

If rates trend back up, what happens ?

http://stockcharts.com/c-sc/sc?s=$TYX&p=W&st=1975-02-16&i=p95977540986&a=98354420&r=202.png
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#2 fib_1618

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Posted 16 February 2007 - 07:36 PM

You may not know it, but Technical Watch posts a weekly review of the interest rate sensitive A/D line issues each weekend, and based on this information, I wouldn't worry about any increases in longer term interest rates for at least the next 6 months....maybe longer.

If anything, the 10 year note will continue to move in a trading range with 5.25% on the high side and 4.25% on the low side for the unforeseen future.

The cumulative Bond Closed End Funds chart below is as of last Friday and will be updated later tonight.

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#3 tomterrific14

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Posted 16 February 2007 - 08:34 PM

What effect will the inevitable and now more imminent unwinding of the "carry trade"....borrow in yen and Swiss Franc..... have in the long end of US Treasury Bonds...and other financial assets? With the Japanese ecomony strenghtening...as their Stock Market seems to indicate, pressure is building for a hike in their interest rates...The yen has bounced off a double bottom recently...putting further pressure on hedge fund leverage.....I read somewhere that a 1% rise in the yen results in 10% loss to hedge funds that are leveraged 10 to 1. Once liquidation of these "no risk" carry trades begins, US long bond rates will lose their artificial resistance levels, one can surmise.....notwithstanding an armada of helicopters from the PPT.

#4 eminimee

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Posted 17 February 2007 - 08:53 AM

Again...just a little perspective. Japan may raise rates to .50% from .25 %......If I could borrow at .50%...I'd take as much as I could get.

TNX Sweet Spot Box. :)

http://stockcharts.com/c-sc/sc?s=$TNX&p=M&st=1990-11-01&i=p66869836738&a=87143129&r=919.png

#5 AJCHUM

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Posted 17 February 2007 - 09:22 AM

If rates trend back up, what happens ?

http://stockcharts.com/c-sc/sc?s=$TYX&p=W&st=1975-02-16&i=p95977540986&a=98354420&r=202.png



Interest rates went up from approximately 1947-1980 the stock market as measured by the dow went up approximately 386% without dividends. That is an 11.69% return not counting dividends. Not too bad for a 33 year rising rate environment.

The mid 1940's had high commodity prices like now, the start of a rising rate environment like now, war like now etc...

There is every indication that we are at the start of an inflationary expansion, just like the late 40's. It could be that real estate and commodities are discounting what's coming. The broad indexes are about to play catch up with real estate and commodities.

I have some very long term interest rate charts that go back to the 30's, that back up what I am saying, along with some custom trend following indicators. Unfortunately I can't figure out how to post my Metastock graphs here. But the bottom line is: Stocks and interest rates will be going up together!

#6 fib_1618

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Posted 17 February 2007 - 09:44 AM

Stocks and interest rates will be going up together!

Agreed....eventually, just not right away.

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“Wise men don't need advice. Fools won't take it” - Benjamin Franklin

 

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Demagogue: A leader who makes use of popular prejudices, false claims and promises in order to gain power.

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