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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: studdog who wrote (99997)11/28/2008 1:17:41 PM
From: Hawkmoon1 Recommendation  Read Replies (3) of 110194
 
I'd be interested in knowing what he's basing that upon...

I could say de-leveraging is over right now, but what are my facts?

I think the reality will be when GS tells the markets they now comply with 12-1 leverage required by commercial banks.

But then that still leaves the European Banks, who I believe are only just beginning to deal with their de-leveraging issues.

And I'm still not so sure about China, despite their tremendous cash reserves. We'll really need to watch the demand situation there, some of which might be reflected in oil prices. Since their economy was primarily export driven, and they were consuming huge quantities of global commodities, it stands to reason that global equilibrium requires demand to remain level there.

But it wasn't more than 8 years ago that it was rumoured that more than 50% of China's loans were non-performing. They claimed they cleaned the mess up, but I'm still not so sure. After all, this is a country that has faked everything from the girl singing their national anthem, to their very first space walk. And as TJ was claiming the other day, China is asserting that retail sales were up 22% just days after they pledged to spend 25% of the foreign reserves in a stimulus program.

I'm just not convinced of a hyper-inflation scenario at this time. I'm FAR MORE CONCERNED over global deflation and protectionism.

Hawk
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