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: LLCF who wrote (51561)	5/21/2006 6:56:38 PM
From: Earlie	Read Replies (2) of 116555

Dak: To answer your query in a serious manner, at this end, I am keying on the US consumer. Until lately, he has supported the globe and he has done this with dough borrowed against the increasing value of his home. With that value now falling, he can no longer borrow from that source (and all his other borrowing sources were sucked dry before the housing bubble). There are already plenty of signs that he is pulling in his horns. Once this picks up momentum. the recession begins. And this time around it is difficult to believe that it won't intensify (on the back of rising unemployment, rising mortgage defaults, etc). We will get bounces but I don't think they will be earth shattering. In this early going, I will book the short term gains. Once I see the downside momentum intensifying, I will just "let 'em (puts) ride". Best, Earlie

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