While commodity prices have sold off the past 2 days due to concerns
with the impact that swine flu will have on global growth, the implied
inflation rate in the 10 yr TIPS today has risen to the highest level
since early Oct at 1.51%. The dynamics impacting the bond market remain
the concerns with huge amounts of supply that would most impact the
longer end of the curve as the shorter end is more influenced by fed
policy (2 yr and 5 yr auctions were good), a slowing rate of economic
deterioration based on recent data, bigger picture inflation concerns
due to the Fed’s monetization of govt debt and lastly a possible game of
chicken between the Fed and the bond market as the 10 yr yield is at the
same level it was the exact day before the FOMC announced their plan to
buy Treasuries. Does Bernanke admit to himself that fighting the market
is probably a bad idea or does he think rates would be higher without
him and double down as a result.


Although the information contained herein has been obtained from sources
Miller Tabak + Co., LLC believes to be reliable, its accuracy and
completeness cannot be guaranteed. This report is for informational
purposes only and under no circumstances is it to be construed as an
offer to sell, or a solicitation to buy, any security. At various times
we may have positions in and effect transactions in securities referred
to herein. Any recommendation contained in this report may not be
appropriate for all investors. Trading options is not suitable for all
investors and involves risk of loss. Although the information contained
in the subject report (not including disclosures contained herein) has
been obtained from sources we believe to be reliable, the accuracy and
completeness of such information and the opinions expressed herein
cannot be guaranteed. An options disclosure document may be obtained
from Mr. Jay Stenberg, Miller Tabak + Co., LLC., 331 Madison Avenue, New
York, NY 10017. Additional information is available upon request.


Member SIPC.

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