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: bart13 who wrote (78001)	1/22/2007 5:35:05 PM
From: Real Man	Read Replies (2) of 110194

When the real break comes, the rescue attempts will simply fail. I think the Fed is already operating in a full rescue mode, with various "controls" imposed on possible breaks. The real scare was JPM in 2002. The manipulation takes place through derivatives, so it will have to be derivative markets that break down first, once the appropriate "multiplier" effect of the Fed's printing is no longer enough to keep them from collapsing - the defaults will also have a huge multiplier effect. Now I suspect all defaulted stuff and more is printed back into the system. Most of this is swept under the rug - the OTC derivative market is dark matter. Nobody knows what's going on there. Yet, these are the largest markets in the World, which means they lead, everything else follows. They are the control mechanism used by the Fed. That control mechanism has to fail for us to see the real collapse of the credit market. Given its current size, it won't just fail, it will implode.

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