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

To: mishedlo who wrote (17471)	12/2/2004 7:32:09 PM
From: russwinter	Respond to of 116555

This is interesting commentary thanks for posting, although I sure don't agree with their notion that the Fed is tightening. What do they think of all the repo and bought outright behavior of late, that's the mystery? I sure agree with this part though, and sort of suspect it may happen. They will get a brief, sharp USD rally from it too: However, the feeding frenzy in corporates would be an argument to continue tightening. In 2002, when most economists were trumpeting the reviving GDP numbers, the Fed took extra easing measures due to the sorry state of the corporate bond market. Given how unbelievably strong the corporate bond market is now, an argument could be made for continued tightening. If we had a vote on the FOMC the week after next, we would vote for a 25 basis point hike, and a change in the language that we would consider accelerating the pace of tightening (i.e. 50 basis point moves) if the ultra-robust financing markets did not slow down.