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

To: Wyätt Gwyön who wrote (12137)	4/18/2004 2:52:47 PM
From: russwinter	Respond to of 110194

I fear the greatest challenge to credit instruments (besides inflation), will be the increasing perception from the cogniscenti that there is a violation of the social contract, and that the Ministry of Propaganda, both here and in Japan, have rigged the economic game like some shady ring-toss booth on a carnival midway. Of course that perception increases even more so after the losses start to mount, and the horses have been let out of the barn. The cogniscenti may have suspected the rigging all along, but apparently are willing to look the other way as long as their portfolios keep getting marked higher. When they get marked lower, that's when you'll hear the squeals and loss of trust and confidence(from the Japanese Diet for example?).

To: Wyätt Gwyön who wrote (12137)	4/18/2004 3:20:41 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

Have you changed positions on treasuries? Just curious. I agree the US may default but is that likely in the next 10 years? 4? 8? 15? 20? Timing it is sure going to be hard. In the meantime we have a genuine overinvestment boom in China that China is trying to contain. I think they will. When people are up to their ass in debt and credit, exactly how is raising rates going to solve anything. It will bankrupt everyone sooner and if that is the "solution" not sure how good a one it is. I hardly see the collapse of housing as the solution to anything. Will it come anyway? Yes I believe it will. As for China floating, or repegging, take a look at couple new posts on my board today. Not gonna happen IMO. Ask me again in 2 more years. Mish