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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (25851)2/4/2005 1:05:48 PM
From: mishedlo  Read Replies (1) of 110194
 
Well it appears that the market is excited that the FED might pause.
Then when they only hike a quarter next month, the market will be excited that the FED only hiked a quarter.
Then more bad data will come in and people will think the fed will pause and the market will rally.
The FED will again hike by a quarter and the market will bereathe a sigh of releif once again.

I suppose we should just all go long the DOW as it should be about 800 points higher by June easily with 10 year treasuries at 3.72%

By then of course there will have been 3 more rounds of refinancings, the commercials will be short treasuries and the yield curve will be inverted. All the bears will have long been wiped out in both treasuries and equities, the bond market will revolt on the pause and treasuries will shoot up 100bps in 4 days wiping out FNM who will have reversed at exactly the wrong time. New treasuriey bears will come in near the end of the run and in the housing collapse will get wiped out in the ensuing rally that lasts forever in the face of the world wide depression that should be starting at that point with a 1500 point DOW drop in a week.

This scenario is called global thermo-monetary-war-madness.
The only way to win is to not play (or to wait for 800 more points of DOW rally before thinking of more shorting)

Mish
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