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

To: mishedlo who wrote (5914)	5/9/2004 3:47:01 PM
From: russwinter	Respond to of 116555

You're on a roll, pretty much nails it. The financial sector has corrected fairly hard of late, but it mostly seems to be more concern about business slowing down and fewer fees, etc, not default or credit quality issues. There has been some credit spread widening, but it is probably considered by the cognoscenti to be "normal" given that a month ago, nobody saw any risk at all. This economy needs huge credit expansion to keep going, and "rollover" has to be a factor now. I imagine you spotted the Reik commentary in Barrons? Message 20109854 He says, "During the past three years, roughly half of the $2.5 trillion increase in consumer debt has been variable rate." Plus a lot of crap that was loaned out or underwritten in the last several years to bail out the "dead men walking", has to be getting ripe. A credit quality seizure, and blow-up should be on the immediate horizon and almost any day. I keep looking for it (Train Wreck II), just as I'm looking for the TW I events. On the economy, my gut is that a slowdown started right after Easter, and is now gathering steam. That could explain why the Fed has lately resorted to monetization. Message 20108456