The year starts with dealers predicting rate cut by Fed but a analytic models predicts something very scary
Sam Adelton
Jan. 1, 2007

The wall Street bond dealers are expecting sharp drop in long bond yields. According to them the Fed will cut rates aggressively. The dollar is falling taking that note, the bonds are poised to rise shapely with lower yields.

Statistical and dynamic programming models are predicting something else. Based on the charts, ‘gold and commodity model’ and above all sentiment model in the bond market, the Fed has lost control over the long bond yields. The long bond market has its own dynamics now. It is true that Fed will most likely lower the rates later this year. But before that something very nasty will happen. The long bond yield and the dollar will skyrocket.

When Fed lowers the rate, it will not move the long bond market. It will just like now, when Fed raised the rates for more than seven consecutive times, the ten year notes hardly moved on that.

Stagflation will finally manifest itself when long bond yields will move up as Fed cuts the short term interest rates. That is the nightmare scenario. Stagnation and inflation can cripple the economy.

The year starts with dealers predicting rate cut by Fed but a analytic models predicts something very scary
Sam Adelton
Stagflation will finally manifest itself when long bond yields will move up as Fed cuts the short term interest rates. That is the nightmare scenario. Stagnation and inflation can cripple the economy.
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The dooms day for mortgage bankers and mortgage brokers as long bonds get ready to send chill in the Wall Street
Alan Hersey
The chill can be severe for mortgage bankers, brokers as the refinance market will collapse. The effect on real estate will also be severe as the buyers will just be pushed out of the market.
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Spitzer promises to bring ethics back in NY – will NJ Governor do the same? Small businesses suffering from bad Governance and ridiculous taxes from Democrats
Sonia Joshi
NJ small businesses are suffering. The taxes have gone ridiculously. Believe it or not, if you have a corporation in NJ, whether you make any money in a year or not, you have to pay the state $750. It used to be $50 seven years back.
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U.S. Treasuries had their best half- year since 2002 on hope Fed will cut rates in early 2007 but technical charts say the long term rates may be heading 9%
Sonja Anderson
The commodities and gold are telling the real story of inflation and the long terms rates are now heading for serious jump.
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A reversal in Factory Orders data will pull bond yields and dollar exchange rates up
Marla Guthrie
On January 4th, at 10 AM, the Factory orders data will manifest a big reversal. The last data saw a slump – a -4.7% drop. This one will show a 1.4% jump.
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Construction spending increased signaling a temporary cyclical boom in real estate within a massive secular bear market
Sam Adelton
When you analyze it coupled with the last new home sales figures, it becomes clear that real estate is ready for some sort of an upturn in the short run.
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Business services, education and health services, and leisure and hospitality saw the most job growth – real estate and manufacturing losing jobs
Alan Hershey
The million-dollar question is will manufacturing sector, business infrastructure investments and real estate turn around to compensate for the slack. If they do, we will see a soft landing. Otherwise we are headed for a deep recession.
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