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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Ramsey Su who wrote (20187)10/18/2004 11:41:13 AM
From: russwinter  Read Replies (3) of 110194
 
<I continue to opine that it has to be employment. >

I've had a little different spin on it. It doesn't seem that wages and employment matters much to consumers (Kindleberger's "loading" theory that I've thrown out)or their lenders, as about anybody with a shit eating grin(witness the huge surge in "subprime") can borrow money. Instead I think some players in the lending food chain will "adjust" or "tighten" their lending standards or criteria. That's why I'm so interested in real time FICO scores, because if they start to deteriorate, then the lending game of extreme road chicken might come unglued. In otherwords some financial institution, with a bit more conservative or prudent (a blog term to start keying on, does anyone know how set one up, we can plug in these words?) bent, may suddenly back away from the credit granting free for all, then someone else butt covers, etc, etc, you know the old herd mentality. I'm also on the look out for anecdotal reports of this, so let us know if you (or anybody, Mish?) spot this? In gaming this out there is also the possibility that the mother lode (Asian CBs) to all this insanity might back away at the margins also. That's why I'm following agency credit spreads so closely.
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