A Tale of Two Markets
28th February 2008
In the 4 years that I have been trading the bond market, I have never seen the markets so divergent as they are now. The treasuries had a huge day today. The curve sloped steeper. The Dow was only down 112 or a little less than 1%. It felt like the market should have been down much more. The economy and inflation dominated the headlines. The GDP came in a little worse than expected. Gold hit a new contract high at 969 an ounce. Oil hit a new high. The dollar got clobbered. All of this is very bad news. Its kind of obvious that the fed is giving up on fighting inflation to fight slowing growth. Its also kind of obvious the Bernacke in not Greenspan. When the market begins to lose faith in the chairman, the market will really accelerate on the downside.
- BA