-- Posted Thursday, 11 May 2006 | Digg This Article | Source: GoldSeek.com

Glance at the chart below and you might think it was a hot new IPO on the Dubai stock exchange, or perhaps a coffee drinker’s EKG after he’s downed a triple espresso. But both guesses would be wrong, for it is in fact a bar chart of yesterday’s price action in the 30-Year T-Bond future. Some old timers may remember the T-Bond contract as one of the deepest and most liquid securities in the world. But that was before U.S. Treasury debt became mere side-action for what has grown into a $210 trillion global derivatives market. For comparison, consider that in 2005 the world produced real goods and services valued at just 25 percent of that amount, or $54 trillion. Clearly, making money the old-fashioned way has gone out of style.

If the chart were an EKG, a diagnosis of atrial fibrillation would send the patient to the hospital pronto. But in the ethereal world of debt and derivatives, it is just a gratuitous blip signifying nothing more than that investors were agitated yesterday when the Fed announced it would raise administered rates to 5%. A moment’s reflection tells us that a little atrial fibrillation in the T-bond market is not such a bad thing, considering that the primary source of the world’s economic growth is now, indisputably, volatility.

Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Thursday, 11 May 2006 | Digg This Article | Source: GoldSeek.com

Previous Articles by Rick Ackerman

© 1995 - 2019

Live GoldSeek Visitor Map | Disclaimer