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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (24113)1/6/2005 12:32:15 PM
From: Ramsey Su  Read Replies (2) of 110194
 
Russ,

here is my grassy knoll theory to what happened with the Fed's release this week.

We all know that the Feds receive privy information prior to its public release. Could it be that the employment numbers this week are a lot weaker than expected?

Now the Feds are trapped. If they continue on its present course of raising rates, could a recession be triggered immediately? So they deployed one of those famous non-conventional monetary strategies - jawbone. They "raised" rates without actually raising rates.

Pretty desperate move.

While I am on this grassy knoll train, I might as well stick my neck out on POG also. I opine that the POG will not be able to return to any sustainable rally until it is decoupled with US dollar weakness/strength. By that, I mean we need buyers to prefer gold over any currency.

This week also brought us a couple of very interesting and totally conflicting stories. William Lyon reported miserable numbers, with huge cancellation rate approaching 30% from a low of 12% 3 qtrs ago. HOV, on the other hand, reported a fantastic December that I can't find any holes in. Next events on the housing calendar are housing starts on the 19th and DHI earnings on the 20th. Should the bet be on the come or don't come line?

Finally, consumer credit this Friday could be very significant.
federalreserve.gov We know that refi is playing a lesser role these days in supporting the consumption addicts. If the revolving debts do not shoot up, would that imply consumers still have some reserves that they used for the pretty good retail numbers in November?

Is 2005 finally the year of the train wreck?

Ramsey
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