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: Tommaso who wrote (79953)	3/13/2007 11:21:18 AM
From: Real Man	Read Replies (1) of 110194

Yep. I forgot the term for those mortgages. Rates are resetting, and credit conditions in the mortgage market are tightening, so I expect a large derivative blow-up very soon. The stock market is just waking up to all these problems. The mortgage market has been the main force behind the post-911 recovery. So, it sure looks like it's over now. On top of that, as the credit crunch cascades through the system, they have no more bullets left - the budget deficit is already extremely high, so they can't do more tax cuts and increase government spending. If they cut rates more, the carry trade will blow up. Looks like checkmate for the Fed. One thing is sure - they will try to print to save the system. So, if gold does go down due to decreased liquidity, it's a buying opportunity.

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