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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Canuck Dave who wrote (26)6/13/2003 3:25:46 PM
From: russwinter  Respond to of 110194
 
<There's no fear of downside risk>

Yes, exactly, the economic term for this is "moral hazard", and it creates enormous distortions and misallocations (such as does the US really need more French Chateau "housing", is that a priority?) in the economy. Of course some bagholder has to come along later and pick up the pieces.
prudentbear.com



To: Canuck Dave who wrote (26)6/13/2003 10:53:45 PM
From: yard_man  Read Replies (1) | Respond to of 110194
 
>>Eventually, somebody tries to cash in their paper profits and the cycle reverses.

When? <<

When everyone has a big new house and has bought all the goodies that they can afford by refi'ing for the nth time, I suppose??

Has to be some pt at which gains in employment in the financial arena can no longer make up for jobs lost in manufacturing or other "real" professions, eh??


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