The Epic American Credit and Bond Bubble Laboratory Message Board

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

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To: mishedlo who wrote (12435)	4/22/2004 12:28:05 PM
From: russwinter	Read Replies (3) of 110194

<I would expect bad news to be bad news.> You just don't understand the role of one percent rates in all this do you? And it's not exactly what you think. I don't know if you were around during the wildcat finance savings and loans days of the 80's? Maybe some of the ole timers can add more, but effectively you had a bunch of "hedge fund" types that just borrowed money without oversight or any discipline put on them, speculated, lost, and walked away "what me worry" style leaving the taxpayers handling the bag. That's what's going on now. Since Easy has "sort of " waved them off the bond carry trade, they just replace it with other speculation. Why not chase after stocks, and the hotter the better. Let's borrow short and ramp up the Russell 2000, yeah that looks good. After all when they finally lose, they have no intention of paying back these loans, and or being accountable for the other side (the short part) of the trade (the one percent side). They'll just say "wasn't that a blast, fun while it lasted." It's the old a "hard dick has no conscious" philosophy of usiness and life. Imagine Long Term Capital Management multiplied 100 fold.

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