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October 25, 2005

U.S. Treasury market is roiled, Tues., Oct. 25, 2005, 3:41 PM

I have been pointing out that as rates and yields rise, there will also be a problem for equities. Here is the extent of the move in the treasury market. This is not a pretty picture to bond traders, or traders holding interest-sensitive equities.

btw, the Canadian CPI data was just published. Prices are up +0.9 pct M/M. And in case you want to know the core number, i.e., ex-energy etc, CPI was up +0.3 pct M/M.

If you compound a monthly increase of +0.3 pct twelve times, there is a serious inflation cost problem " even if we are not eating or buying fuel for our autos or healthcare or ....

And if we compound +0.9 pct M/M to derive an annual rate, well let's not think about it.

Besides, economists and Wall Street would just tell us it doesn't matter anyway. :-)

Posted by Posted by Bill Cara on October 25, 2005 03:42:24 PM | Category: Bonds

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