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: westpacific who wrote (77923)	1/21/2007 2:21:35 PM
From: Real Man	Read Replies (5) of 110194

More from Doug Noland: "Devastating Credit system crashes – fortunately much rarer events than bursting asset Bubbles – are the consequence of protracted periods of Credit and speculative excess. I would argue strongly that the mandatory backdrop demands repeated, extended, and escalating policymaker intervention and marketplace manipulation. Only such a constructive environment for prolonged financial excess can create such acute system fragility – unadulterated markets with functioning self-adjustment and correction mechanisms and dynamics would not. Regrettably, the Fed’s asymmetric strategy with respect to ignoring asset Bubble while they are inflating and then reflating aggressively when they falter is tantamount to flagrant market manipulation." The Fed is the only reason for such extreme risk taking. The Fed market intervention has reached new all time highs recently. Even a hint of a decline is no longer tolerated. GM bonds? Fixed right away. Ford bankrupt? Fixed right away. And so on, so forth.I have a strong suspicion the stock market is no longer free - the management policy through the futures has been implemented. We have to wait and see how things go. All "events" that are supposed to crash the pig have been bullish instead lately, due to extreme injections of liquidity by the Fed following such events, and through outright manipulation of stock index futures and other derivatives. Ultimately it will be the dollar that will crash, leading the crash in bonds and stocks, and the myriad of leveraged derivatives. For a credit system backed by the full trust in the Fed that creates the paper dollars, this is the only way. Russ still seems to believe the markets are free, despite ample evidence to the contrary.

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