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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: John Vosilla who wrote (64540)6/25/2006 11:49:32 AM
From: UncleBigs  Read Replies (2) of 110194
 
Kauffman and Noland are looking at recent credit growth statistics to conclude the Fed is behind the curve.

These are rear-view looks at the economy.

You have to ask why credit growth is so strong. It's to consume goods, chase appreciating assets and buy back stock so executives can cash out their stock options.

The leading edge of the economy (housing) has slowed dramatically. This will ripple backwards over the next 6 to 12 months. It's like the front end of the train has left its tracks and is careening down the mountainside while the people in the caboose think everything is wonderful.

Real estate is THE economy. The Fed has already overshot in my opinion and I think they know it. They wanted to stop at 5% and then freaked out as commodities were going parabolic.

All of the sudden they went to tough talk on inflation but haven't done anything other than take some speculation out of the markets.

I think the Fed announces a pause after the next meeting. It may trigger a huge spec trade again but they need to do it to keep the stock market intact.

To me, the Fed is pretty easy to figure right now. Just ask yourself what Cheney and Rove would do.
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