The following is the view of Hurricane Katrina as seen by the average ghoul in and near the bond market. For that, I apologize. Katrina has caused a nosedive in Treasury rates, a reconsideration of the state of the economy and the Federal Reserve's intentions, but so far has taken mortgage rates down only about an eighth of a percent from last week, near 5.625 percent. Traditional economic indicators aren't worth much now: anything pre-Katrina is Jurassic Park; anything post-disaster will be garbled for months. Pre-Katrina there was already an argument about the economy, and the bond market by last week had priced-in not only an end to Fed tightening, but an economic slowdown next year and probable Fed reversal. Federal Reserve Chief Alan Greenspan and others very much disagreed. The fina...
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