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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: ild who wrote (44614)11/1/2005 3:31:44 PM
From: ild  Read Replies (1) of 110194
 
Date: Tue Nov 01 2005 14:14
trotsky (@gold) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
should credit spreads really break to new annual highs, it'll be tough sledding for the gold bears. gold and government bonds will be sought after if/when that happens.
as an aside, money flows in pm stocks have looked bullish about 90% of the time during the recent correction. this is very similar to the oil sector in late '03 - Wall Street analysts HATE the sector, but money flows are strong.

Date: Tue Nov 01 2005 14:00
trotsky (@credit spreads) ID#248269:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
credit spreads have recently resumed their widening trend, and look now poised to break into new high ground for the year. if they do, we'll soon have crisis conditions. keep in mind that many hedge funds are heavily engaged in relatively illiquid and exotic spread product in their continual hunt for yield. many have 'texas hedges' put on that my or may not work. anyway, there's too much debt in the system, much of it of questionable quality, and highly leveraged speculators are unlikely to be able to bear a significant amount of pain after the markets have been so calm for so long. everybody is betting on volatility staying low and there's widespread complacency regarding the downside risks.
well, the risks have just increased by another notch, and will increase some more with the rate hike.
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