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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (27962)	3/7/2005 9:06:42 AM
From: NOW	Read Replies (1) \| Respond to of 110194

you think the S&L crisis was big compared to what we could face???? and a period of faling interst rates would likely happen with falling wages, and debt crunch could equally well happen

To: John Vosilla who wrote (27962)	3/7/2005 9:25:34 AM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

John, I have to make a correction to your repeated remarks about debt being wiped out during the S&L debacle. That debt was never wiped out, it was transferred, transferred to the $500B or so RTC spent on the bail out. While debt was ranferred to the tax payers, the assets went to the likes of GS and GE Cap at deep discounts. While it is true that the borrowers' obligations were wiped out, through BK and other means, the debt is paid for by someone somewhere. Looking forward, who is going to pick up the tab this time around? FNM FRE shareholders? WM shareholders? Taxpayers for sure in some manner. CBs holding agency paper? ..............

To: John Vosilla who wrote (27962)	3/7/2005 10:45:59 AM
From: mishedlo	Read Replies (2) \| Respond to of 110194

Mish should explain to us why it was that we did no enter a deflationary period in the first half of the 1990's. Glad to. It is very simple: 1) RISING WAGES 2) ABUNDANT JOBS Now we have rising debt, lower pay, fewer jobs and even fewer high paying jobs. That mix also explains exactly why Walmart was unable to raise prices at christmas, why GM and Ford can not raise prices, etc in the face of hugely rising input prices (PPI). Houses are rising because hot money via loose lending practices is chasing assets. When the primary assets of everyone starts falling so will consumption. The ONLY thing keeping spending up right now is rising asset prices and a booming construction industry (housing). No one can look ahead and see what happens when the latter ends. Inflation models see this boom going on forever. Mish