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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: John Vosilla who wrote (57650)	4/7/2006 12:39:04 AM
From: mishedlo	Read Replies (1) of 110194

Fed funds were kept too low for too long. If they had started raising a little sooner and at faster increments the chances of success would have been much greater. We needed a flattened yield curve a year ago.. Speculation was way out of control by then. All those unneeded condos being built and 20-30% added home appreciation in 2005 will have serious ramifications for years to come.. Bingo I was wrong too I thought it would be 3 hikes and out After 6 I threw in the towel and said the Fed would keep hiking until they broke something. They broke housing (finally) but now it seems that is not enough. If they can not rein in carry trades and IPOs and buybacks they will keep hiking and housing be damned. In isolation, housing says they have overshot already (due to lagging effect), how much further they have to go is up to the markets. Right now I would just assume see 3 more hikes (which may mean they are not coming). Mish

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