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

To: mishedlo who wrote (22891)	2/4/2005 1:04:32 PM
From: John Vosilla	Read Replies (2) \| Respond to of 116555

Sounds like Greenspan is going to hike until he gets his mild recession. We need a true cleansing of excess housing and consumer debt. That flattening of the yield curve at 3.5% won't do it. Are you or Heinz aware of the true extent of the housing mania going on in parts of this country? We need fixed rate mortgages at 7.5%+, tightening credit standards abolishing the 1% starting pay rate on ARMS, require at least 10% down on any purchase and stricter credit checks and documentation of income or this bubble will not burst even in another minor recession. We were in that recession mode in 2001 and housing never missed a beat. It is even worse now as perceptions of 10% inflation and appreciation is ingrained in the thought process of the masses in much of this country. Even you guys would have to admit the BLS manipulates the CPI somewhat. Add in the housing component along with gas, food and real estate taxes and we are certainly much closer to 10% than 3%. In this latest 5 year cycle the long term treasury purchasers, commodity buyers and the leveraged to property investor have made out very well while the savers, renters and stock market investors have not. Someone is truely the fool in this new world it just has not been played out yet and none of us knows for sure....LOL