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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Jim Willie CB who wrote (5673)1/21/2004 1:00:57 PM
From: mishedlo  Read Replies (1) of 110194
 
when do you expect to see some Asian import price inflation?

This is very hard to say. But German car makers are surely bitching. so...... Will the US blink on that or the EU? I say the EU will, and for now China does not care as it uses all its dollars to buy useful stuff like building up its oil reserve. Japan clearly wants to protect its Auto and electronic export business so I so no reason why they will suddenly reverse here no matter how many billions they blow.

and do you think it will have any effect on Treasurys?

That is harder. I really do not know. The logical answer (I think) is that it should. But, given my scenario of flight to safety if the US equity market goes to hell and junk bonds go to hell, I think there is still a "flight to safety" that has not occurred yet. IMO there are just too many good reason NOT to short treasuries (but that is not the same thing as saying go long them at these levels). My guess is they are leaded lower in the intermediate term.

or do you expect 1% ST money to be used to inflict more leverage on LT rates?

I believe that is the reckless intent of the FED. It seems clear they want to do anything and everything to re-ignite the housing refinance bubble. And given debt levels everywhere that is a moral hazard of the worst kind.

I subscribe to a lot of "Russ's trainwreck theory" but not all of it and not necessarily in the same order that everyone else sees it either.
Mish
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