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

To: mishedlo who wrote (22900)	2/4/2005 3:21:14 PM
From: John Vosilla	Respond to of 116555

<Your assertion that it will take 7.5% interest rates has no real basis in reality. I think we see either a trigger or consumers just plain give up.> I hear what you are saying. No doubt a flat yield curve takes us into a national recession. But remember in any market 60% of the GDP is local spending by consumers. A continued building boom and continued cash out refis from appreciation is a huge stimulus to restaraunts, retail, financial services ect..as well as jobs and consumer confidence. There is just so much momentum it feels just like the dotcom and telecom mania revisted. I know this too is a scam but as long as people get the 1.25% ARMS or 5% fixed rates little will change. We were close to 6% across the board on flat yield curve in mid 2000 and need much closer to that range than where we are at today. How about 4.5% on the fed funds and 5.5% long end to be the trigger?