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: glenn_a who wrote (90842)	1/27/2008 10:25:35 AM
From: benwood	Read Replies (2) of 110194

I agree that it is seriously dangerous business right now. The volatility behavior reminds me of 1987 and what I've read about 1929, where there were shots across the bow but a nearly immediate 'all clear' and complacency reigned supreme until shattered once and for all. I think the system is teetering on the brink and the point of the massive rate cuts last and next week will be to keep it from plunging over the edge. But I think they have built up too many monsters that simply cannot be inflated away -- derivatives that unwind unexpectedly, previously sound companies reporting ever more assets as being fictitious and not really an asset at all, revelations of fraud. I really do not think the Fed can simply inflate and make this go away because it is too unstable and there far less under the hood that previously, or currently, believed. Eventually, I believe our 'financial engineering' in the US will be compared to the phony economy of the old USSR that was only revealed after it's collapse and the lies finally ended.

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