dow, page-155

Just looking at these Bonds again, in 01 it took ~1.5% reduction in interest rates to get the 5yr yield curve to peel away to the upside from the shorter term bonds, whereas now it took ~1.75%.

Then in 01, it took ~2.0% to get the 3yr yield to just start peeling away, whereas now ~2.15%. Back in 01, it was from a higher base of 6.5%.

Time equivalent to then, now at April 01. Think rates need to drop more to let equity markets with the now low forward dividend yields, attractive compared to bond yields. October 01 low was 12% less than April 01 low, but looked like the DJIA wanted a low in June, but for some reason was averted. In Oct 01, or equivalent now to 6 months in future, rates had pretty much completed their rapid descent, before flattening out gradually, but went lower in 02 with DJIA going even lower then as well. Bear mania.

The difference between now and then is the USD depreciation combined with the Term Auction Facility, but could be offset by increasing inflationary pressures due to commodity prices increasing.