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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: KyrosL who wrote (1352)	3/5/2004 5:58:53 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

So it's not clear to me how jacking up short rates from to 1% to 3% will hurt the real economy. Do you have any idea how many companies are dependent on short term rates not converted to LT debt? Do you have any idea how many variable rate mortgages there are? Do you have any idea how many people are on the edge of falling off a cliff that this would push them over? Do you have any idea of how many TRILLIONS of $ of derrivatives that would be wiped out in a sudden move like this? I do not know either but... Quite simply we are way way way passed the point of no return, and i seriously doubt you would like the result unless you were shorts stocks and treasuries cause the world would collapse. In fact, if you were long puts, I am not sure you would even get paid. Those that owed you might be worthless. It is 100% without a doubt preposterous to suggest an immediate hiking of rate by 2%. Mish

To: KyrosL who wrote (1352)	3/5/2004 9:00:35 PM
From: excardog	Read Replies (1) \| Respond to of 116555

Sorry mish... tend to agree with Kyrosl that the short rate is going to invert over the long. This is going to enable the housing market to continue it's bubble but alas take the economy back into recession if it's not already there or at the edge of one. A recession will slow down the rate of consumption of ever inflating commodities. Thus checking their price rise. Eventually though your scenario will come to pass just think your early. Of course that's what makes a market. When/if PPI is released one might consider being long a gold or two. Does anyone have a favorite large cap?