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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: Raymond Duray who wrote (10519)	3/20/2004 11:18:19 AM
From: mishedlo	Read Replies (2) of 110194

I've certainly gotten the impression that Greenspan is signaling a rate hike. Why haven't you? Yeah right. Telling people to get into variable rate loans. Insisting that inflation is low. Tieing rate hikes to jobs that are not coming. Saying we can continue to be patient. Showing MORE concern on Tuesday's FOMC than the previous month about jobs. No bias change towards tightening. Risk of inflation and risinflation evenly matched. WTF did he say that remotely suggests hikes are coming? You want to balance all of those with one stupid ststement that rates can not stay low forever? Well I agree they can not stay low FOREVER, but FOREVER is a pretty damn long time. If you can't even get a bias change on that PPI are you going to get one on any PPI rise? My answer is no. Look at him being pissed off at Japan for supporting the US$. He does not want it supported. He has and will continue pushing on a string trying to create jobs in a fool's game that can not be won. You really think he is going to risk a recession hiking into an environment where jobs are being lost not created, where wages (especially in real terms) are headed lower not higher? Treasury bears and Eurodollar bears have gotten slaughtered looking for hidden meaning in everything little thing he says, like changing "considerable period" to "patient", and now I am assuming you are focusing on a simple truth "that rates can not stay low forever" when that is based on his stupid belief that jobs will be created SOON, and that we are not headed back into a recession, etc etc etc. Hint: IMO "forever really means forever" as opposed to "forever meaning this year or next". And given that forever means forever I agree 100% with his statement. Furthermore I do not think he would have been pushing variable rate loans if "forever meant this year or next" This market would collapse if he started hiking. You know it, I know it, and Grenspan knows it. Right now the market and housing are the economy and he is not going to voluntarily kill those IMO, and he sure is't hiking with consumer sentiment falling off a cliff either. Now if you see something in what Greenspan has said that is inconsistant with the viewpoint I just laid out above, I sure would like to see it. Thanks Mish

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