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

To: yard_man who wrote (11406)	9/3/2004 9:56:58 PM
From: orkrious	Respond to of 116555

nice ending from noland this week prudentbear.com Watching the recent market environment, I am reminded of the 18 months preceding the Argentina financial crisis. There was no doubt in my mind that the Argentine Credit system had become acutely fragile – with an untenable currency derivatives/hedging marketplace. Credit and speculative excess had inflicted great vulnerability upon the financial system and severe structural distortions to the real economy. At the same time, it was impossible to predict how long the authorities and financial players could hold crisis at bay by sustaining excesses. Throughout, very few appreciated either the market dynamics involved or the acute financial and economic fragility that had developed. With so much at risk, extraordinary measures were taken to sustain the boom, support its currency system, and ward off bust. But it was all for not. Indeed, a very strong case could be made that postponing the unavoidable financial and dislocation added greatly to the severity of the Argentine bust. The nature of current U.S. excesses and maladjustment far exceed those that buried Argentina. But, for now, it does seem to be a question of how long the U.S. Financial Sector “Horse” can drag along the Economic “Cart.”