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

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To: mishedlo who wrote (5359)	1/17/2004 1:00:31 PM
From: russwinter	Read Replies (3) of 110194

<I believe that is the intent.> You are describing what I've characterized as the "trainwreck scenario". Because if that's their intent then you will continue to see tremendous cost inputs pressures (at least up to the train wreck) on everything I've been mentioning: from transportation bottlenecks to energy to food to metals. Outfits will try as they may to pass these on to the next level of customer, and if they fail, they will shut down or rationalize operations by laying even more workers off, or sending labor overseas. Just one example of how this works: biz.yahoo.com This is THE train wreck, and should be coming along very shortly. I suspect it's underway as we speak. So if the CBs just allow the trainwreck to occur without applying the brakes at all (the analogy is a driver seeing a deer well down the the road, and just hitting it full bore), I'm still a little unclear on why going long rate futures is the way to play it? Wouldn't just a straight short of everything be better? A trainwreck will negatively impact all these ED deposits. It would end up being a credit spread play (TED spreads would widen enormously).

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