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

To: reaper who wrote (1709)	3/10/2004 2:43:50 PM
From: mishedlo	Respond to of 116555

Rien on China slowdown Current growth rates are not sustainable for the strain they put on the oil supply. While some growth is possible, the rate of growth has to come down, either voluntary or it will be enforced by the POC. And don't forget the other commodities either, things need time to cool down and get supply/demand back into line. While in the US and the rest of the "first world" wages are the biggest part of goods, that is not true for china. Higher prices for commodities hurt china more than it does the US. That is probably the main reason why China wants to cool their growth rates. Best, Rien.

To: reaper who wrote (1709)	3/10/2004 3:04:29 PM
From: ild	Respond to of 116555

GSEs are just too big to be hedged. They can play the markets to soften blows, but in most cases it would be a waste of capital. There is no doubt their debt will have to eventually be bailed out by the US govt, but not their shareholder's equity.

To: reaper who wrote (1709)	3/10/2004 3:40:10 PM
From: Jim Fleming	Respond to of 116555

reaper I agree that the derivative situation as a whole may (will?)come apart at the seams at some point. The GSE's will get Fed support, if necessary, at that time. I don't think any of us can comprehend the awful potential of your MCHVIE. A large part of any approach to getting a handle on the problem, after serious belt tightening, will be revenue enhancement via taxes. Somebody is going to have to sell that to the electorate. The frightening thing about the derivative puzzle is that there is no way to find out how big it is without an event that shakes out all the pieces. It is difficult to get people to understand a problem if you can't quantify it. I hope you are wrong but afraid you will be right. Jim