1.

How do you price a callable security – a 20 year non-call 10 year security, for
example – should that be priced to a 10 year on relative value basis?

Will raw material prices rise faster than top line revenues for industrial manufacturers?
This is a question that those who think all this cost cutting will lead to greatly expanding
margins when any demand comes back, which will increase the top line. However, much
of the cost cutting is not only from laying off workers and becoming more efficient, it
was from raw material/commodity costs abating over the previous year. These costs are
on the rise again, and with a weak dollar policy and China buying every commodity
under the sun, a decline in costs does not seem to be in the picture.