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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (35126)7/1/2005 10:59:44 AM
From: carranza2  Read Replies (2) of 110194
 
Roach is simply brilliant.

Wish he had said when his short-term bond bullishness will revert to his endgame bond bearishness, but I suppose the clues will be there for all to see.

One thing he didn't discuss and which might have an impact on his views on the US economy is the possibility that the Chinese may start disposing of their T-bill hoard, or slow their continued purchase of them, as their economy slows and as commodities prices go down. The Chinese may see lower commodity prices as signalling an asset fire sale, and may go on a buying binge. Such a binge has to be financed somehow, and the likely source may be T-bill sales, putting pressure on their yields as the US searches for ways to finance the budget deficit. Depending on the magnitude of such a phenomenon, the case for Roach's short term bond bullishness becomes somewhat weaker.

Nonetheless, the case for long term bond bearishness seems air tight.
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