The Epic American Credit and Bond Bubble Laboratory Message Board

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

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To: russwinter who wrote (61877)	5/24/2006 12:34:50 PM
From: GST	Read Replies (1) of 110194

Lets say that 10% of the resets trigger a default -- that is $200 B -- enough to make a mess of the market for a while put chump change compared to a major shift in the dollar. If it turns out to be 20% it is still well below the savings and loans writeioffs and we rode that out with minimal difficulty. Look, I agree completely that housing is overpriced. The distortions are real and they must be corrected. The outcome will be painful and costly. But all of this pales when compared to the implications of the dollar bubb;e. Housing goes sour and we take a hit -- big deal. We adjust. But tell me how we absorb a 30% to 50% haircut on the dollar. It won't be pretty -- I don't think anybody has got their mind around the implications.

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