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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: orkrious who wrote (12583)4/25/2004 11:20:48 AM
From: russwinter  Read Replies (5) of 110194
 
<he thought everyone believe it will take higher rates to collapse the housing bubble, when in fact it will likely just run out of gas and collapse, just like it did in japan.>

This is a big, big question. When you look at what's happened though, the credit just finds another "loophole" (now it's HELOCs and ARMs) and keeps growing. About the only scenario I can see that would support a different outcome (from the involuntary inflationary bond panic) would be the sudden financial collapse of a very large player, leading to a daisy chain effect. I wouldn't exactly call that one, "running out of gas" though. Japan's bubble really started deflating when they finally tried way too late, to do a controlled asset inflation deflate.
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