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

To: ild who wrote (2035)	11/11/2003 12:13:10 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

I think the bloom has come off the consumer, and the momentum is down. Retailers will not make expectations, especially if the stock market starts fading (will feed the psychology down slope). story.news.yahoo.com There's been a lot of talk, even among those with a bearish disposition, about a "final blow off", going into year end. To me this seems to be consensus. In this kind of thin market it could happen, but I see it more as follows: Easy Al isn't the only game in town, and I feel the big reflation is abating even with him. Most of it is just the natural aging effects of the huge refi boom of the second quarter. : Message 19479948 I think the dollar support game may change some (and fairly soon) at the margin. China needs capital to correct infrastructure deficiencies, and I don't think they want to become dependent on foreign flows for it. Message 19483279 They will reroute some of that excess USD for domestic purposes instead of loaning it to US homeowners (the driving force of the credit bubble). And they may just go ahead with a currency repegging, as it serves as a way to cool off their stretched export sector and economy some, and gives their population a wealth boost to tide them over in a slow down. The slow down will also take the bloom off the commodities market, except perhaps energy (the most misunderstood commodity of all). I see the odds of an energy shock this winter as fairly high. Of course the supply pressure on rates is relentless: twin deficits are heading from 3 billion a day to 3 1/4 billion. Japan's a bit of another question, they will probably continue with the "great Old Maid" recycle until they drive off the cliff. On the market I'm keying on "Trim Tab type" liquidity indicators right now. I think it's totally a function of when fund flows abate from the public, and the IPO and secondary market finally gear up. Once there is a marginal shift (and we may be close with the fund scandals picking up) here, the stock market will break up like an iceberg in warmer waters, as the momo and leveraged players head for the exits.