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

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To: russwinter who wrote (10906)	3/28/2004 2:38:29 PM
From: Jim Willie CB	Read Replies (1) of 110194

low rates beget even lower rates they actually slow the economy in 2002, $1100 billion in fixed income from trezbonds, etc in 2002, $600 billion paid in mortgage interest so the net is a massive slowdown for the economy low rates are just the opposite of economic stimulus in past cycles, low rates encouraged new capital investment this time they encourage zero deals for cars, low downpaymt deals for houses, and incredibly deep yield carry trade speculation too late to fix without a long painful recession one that will get out of control the tilt away from real economy and toward financial speculation economy is getting carried away 30% of S&P mktcap tied to financial companies plus another 10% of S&P profits come from financial subsidiaries of non-fin corporations so one could conclude that 40% or so of US major corporations are financial in nature this is horrendous USA chief exports: debt, jobs, military hardware, arrogance / jim

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