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

To: Elizabeth Andrews who wrote (10777)	3/23/2004 11:45:12 PM
From: Jim Fleming	Read Replies (1) \| Respond to of 110194

Elizabeth Andrews <It now takes a much smaller percent of GDP to be a world power, if you know what you are doing. > This administration has no idea of what it is doing domestically and internationally! They were warned by veteran experts in the State Department and intelligence services of the possible and probable consequences of the Iraq adventure and ignored that advice. The Economic "Russian Roulette" we are following on these threads is most likely going to end badly soon. A new administration is seeming more likely every day. Good luck to them and the Boston Red Sox, as we used to say years ago.(g) Jim

To: Elizabeth Andrews who wrote (10777)	3/24/2004 12:14:40 AM
From: mishedlo	Read Replies (2) \| Respond to of 110194

The housing bubble is media babble as people like Noland and others are focused on the micro issue and not the macro. Housing can’t be imported and the public right now is choosing housing because it’s probably cheaper than owning the stock market as a store of wealth. It is no more complicated than that. Why have Japanese property values declined for 13 consecutive years?!! Does Japan imnport anything but oil? Regardless of whether or not housing can be imported it will reach a price level that is insane (possibly based on loss of jobs) and start declining. We might be there now. Clearly in some areas of the country there is 100% without a doubt a bubble. My dad died in Dec (danville Illionos) and we just sold his house for $15,000 (admittedly it was in horrid shape) but by any stretch of the imagination the "recovery" and even the boom years preceeding that just Passed Danvile by. As for the rest of the country, I do not know when or from what level or how long the decline takes but given the 0% down leverage and 1% rates, it probably would not take much to sink it. Housing in California seems totally insane for starters. Of cousre housing deflation is exactly what Greenspan is fighting and no one realizes it. Any level of inflation is better than the deflation trap of Japan to THIS central bank. Europe would have a different answer. We remember the great depression, Europe remembers the inflation in Weimar Germany. Here housing will not go without a struggle, but in the UK and Australia they are trying to kill a housing bubble. go figure. IF is not the issue, When and from Where, and the catalyst to start it is. Mish

To: Elizabeth Andrews who wrote (10777)	3/24/2004 11:05:11 AM
From: Steve Lokness	Respond to of 110194

Elizabeth; Interesting comments even if some of them sound as if they were drafted by Greenspan. I will be so bold as to take issue with a few of them. 1) <<today’s wars do not suck up a disproportionate amount of commodities except cash>> The Iraq war is a tiny war compared to what we have previously called "wars" and yet it has had major influences on commodities. The example I have used is that OSB the product used in virtually all buildings today has gone from 5 to 18. The reason most often given is that the government suddenly came into the market (not caring what they paid) and bought trainloads of the stuff to use as temporary throw away buildings in Iraq. If you don't think the government played a MAJOR role in this commodity, then what caused the increase? 2) <<The housing bubble is media babble>> This comment sounds as if it was right from the mouth of Greenspan!! If people lose money in Yahoo, while it might hurt, it is not disastrous. If people suddenly wake up one morning and find their adjustable rate mortgage has jumped to a rate they cannot afford - THEY LOOOSE THEIR HOME! 3) <<the public right now is choosing housing because it is probably cheaper than owning the stock market as a store of wealth. It is no more complicated than that.>> More Greenspan bizarre thinking!! This is really just a continuation of the last thought and yet is is so dangerous that I repeat! People are doing just exactly what you say and are placing huge bets on second (or THIRD) homes, refinancing to buy SUV's or WalMart junk, or additions onto their existing homes. If this doesn't scare you, it should!!! Why? The same thing will happen to housing that happened to Yahoo in the example you provided. (Did you set me up for this thinking or do you really NOT understand the consequences of decreasing home values?) If Yahoo crashes, everyone still have their Yahoo stock which afterall is just an investment. If HOUSING crashes, bankruptcies mushroom and all of those businesses so dependant on a healthy building industry (ALL THOSE JOBS WHICH CANNOT BE OUTSOURCED!!) also go bust. But this time it is even more significant!!!! because housing via refinancing has been keeping personal spending roaring as they fill up their pockets with cash from their home equity!! Greenspan is absolutely nuts on this one! The physcological damage this would do to our economy is huge and could take a very very long time to recover from. 4) <<The problems will occur if the Fed starts contracting the money supply, which they aren’t about to do.>> And this is the problem - they can't raise rates because of what it will do to the housing industry and they can't leave them where they are because of the roaring inflation as witnessed most significantly in the housing industry. Elizabeth, the housing (mortgage) bubble has the potential to make the last bubble look tiny in comparison. Watch housing - not silver or gold - for the answer to where we go from here. Steve

To: Elizabeth Andrews who wrote (10777)	3/26/2004 9:01:57 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

Copper drawdowns continue unrelenting at about 6000 per day, LME at 206,250, and Comex at 219,204 as of yesterday. They are starting to go after the Comex inventory now. The dry bulk shipping index is cooling slightly, but nothing to suggest any major abatement of Asian demand is taking place. quote.bloomberg.com Also supporting your points on new metal supply, the added costs of concrete, steel, and energy may take many potential projects out of the picture. Only an economic bust will solve this massive resource imbalance. The markets continue on, largely oblivious to it.