Loki and Hack,Yes, common sense is a good tool and contrarian thinking a good straetgy, but my current experience of current market conditions is that rates are going higher, because I can't get fills on my limit orders.Normally I can bid between the spread and get a fill. Sometimes, if the bond moves after I've caught the market maker at an intraday low, I've even been able to end the day in the money on the position, for having already recouped my commission. But right now the bond desks know they have a public clammoring to get into bonds and are refusing to cut a deal.E.g., just now I bid 95 for the only ten CCK 7.5's '02 that E*Trade had in house and was offering at 97.97. My bid was pushing things, but their spreads are normally 5 points, so I was giving the guy a couple of bucks. The desk bid me back at 98, because he knows the company has turned around, the yield is fat, and he can get his price from someone else. Two days ago my limit order for some Freeport bonds just sat there that normally would have executed. Look at the offering lists. The stuff is trash or it's expensive. My conclusion? The bond desks are pricing things as if rates are going higher. I don't know where rates are headed for sure. But this is not the easy pickings of two years ago when bonds were despised and truly cheap. Now they are likely at a top. Caveat emptor.Charlie
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