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

To: russwinter who wrote (6075)	5/10/2004 11:07:23 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

As steep as the curve is, I think it actually still encourages the carry trade. The steeper the curve the MORE it should encourage the carry trade. Borrow at 1.0% loan for 4.78%. I am surprised that some asset alligators have not been agressively putting back on the carry trade here. I think they will IF they see Greenspan aint hiking fast. This whole mess now is a confidence game mixed in with various lies. 1) how good the economy is 2) how good jobs are 3) confidence that the FED is in control of anything here 4) there is no housing bubble 5) there is no debt bubble No one believes inflation is low anymore so that is gone. I still maintain that a mere 1% hike (coupled with a slowdown in China), is all it will take to cause serious deflation. We do not see it until housing slows. How many months do you give housing? If Housing goes to hell we are in even deeper sh*t if China keeps on booming. M