Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: russwinter who wrote (25185)	3/9/2005 12:07:48 PM
From: mishedlo	Read Replies (3) of 116555

From Heinz on a global recession i suspect that a recession will hit BEFORE the curve has a chance to invert. imo the housing bubble is a hair away from blowing up (based on the exhaustion theory - credit isn't expanding fast enough to outpace the increase in supply), and if i'm right about this, it should take basically all the extant asset bubbles down with it, including commodities (albeit excluding gold, since gold would likely react coincidentally to a widening yield curve). admittedly though this is just a hunch still awaiting confirmation in the real world. it's not totally inconceivable that a curve inversion will occur, it just doesn't seem likely. what does seem likely is that the eventual recession will be a global event, with grave repercussions in emerging markets. that new font of relentless speculation, China, is going to have its 1929 at some point, and i suspect it'll be kicked off by a global housing crash (by the way, that is likely to start at the periphery, and spread from there, not unlike the Thai crisis becoming an Asian crisis after a while. the UK and Australia are good candidates as starting points in this case).

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