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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: ild who wrote (18317)	12/10/2004 12:50:46 PM
From: mishedlo	Read Replies (3) of 116555

Recession Trigger & Progression of Bubble Popping Trigger: consumers finally throw in the towel. 1)consumers finally throw in the towel This could be happening now. With savings at .2% there is just nothing left. 2)consumers waving the white flag leads to more company cutbacks and job losses especially in retail. 3)Sustained job losses in multiple sectors (retail and manufacturing) finally pricks the housing bubble. There are no more buyers. Home prices head south. 4)Home construction follows home prices south. This leads to more job losses in trades an appliance areas. Trucking and tons of other stuff. 5)In the face of falling home prices credit dries up. Cash out refis are non-existent without lots of equity. 6)The fed pumps money into the system (or attempts to), but there are no borrowers that banks want to lend to. Across the board, lending collapses. 7)Collapse in lending and home prices pricks the corporate bond market. Corporate bond yields tighten. There is a rush into treasuries. 8)Busting of the corporate bond markets busts the stock market. 9)Major Recession Mish

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