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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (87014)9/28/2007 12:10:34 PM
From: bart13  Read Replies (1) of 110194
 

I guess you are saying he missed the Fed being loose?


Sort of.

What I'm saying he missed is the size of the various liquidity injections from TIOs and elsewhere like from custodials and the "GS effect" and derivatives, the lagged effects of looseness in years prior to roughly 2005 and other behind the scenes moves like the lack of use of their regulatory powers and recent 23a changes.

My basic point is that he has undervalued and underestimated monetary effects from the Fed and other CBs. His recent comments on what's happening with base for example not only focuses excessively on one element but also ignores the very real effect of changes in base over the years and decades.

I am most definitely not saying that the Fed is loose right now, especially during the last few months. The thin red line below in this chart tells the broad story for me.



And on a global basis, there's the velocity data from Gavekal (not normally folk I pay much attention to) which both shows what he missed in 2005 and 2006 and also shows the ongoing current crunch.



I'm also not saying that his performance won't improve, but I also believe there are better vehicles for investing & trading... and I have no interest in debating his funds. Everyone has their own approach and more power to them.

And I missed the overall size of the effects too, if not their existence... live & learn...
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