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

To: ild who wrote (33799)	6/3/2005 1:54:12 PM
From: orkrious	Respond to of 110194

suuuuure - "this time it's DIFFERENT!!" ...yes, at 'some point'. it could be today. and it could be someday in 2014, with the 30-year bond sporting a 2 handle. lol, classic heinz

To: ild who wrote (33799)	6/3/2005 2:09:50 PM
From: russwinter	Read Replies (2) \| Respond to of 110194

<even if it succeeded in doing so, which is highly doubtful, that wouldn't last long> What this fails to see, is that all these Old Maid Cards are paper assets backed up by a "promise" to pay. Intellectually I totally miss this bonds yielding next to nothing argument. It's some kind of strange altered reality world once again to my pea brain. Either they get destroyed by inflation (my argument)or in a deflationary bust environment they don't get paid back at all, or at best, credit quality declines and they get repriced accordingly. Either way bond holders lose. And there are "a lot of them" out there. They are widely owed, indeed severely overowned, with much if it held by the worst investor on the planet, the Japanese central bank. In the last eleven weeks for instance FCBs (translate Japan) have tread into the US agency market to the tune of $41 billion in new purchases. Talk about buying stupidly at the top. 4% paper as housing rolls over, bizarre purchases. This whole bond market, including Treasuries is really the biggest Bubble of all the Bubbles. There too much of it, more coming all the time, and they are billgrossly overvalued. It's Mr.Creosote's big bloated fantasy portfolio personified. Strangest of all, is that the market's actually believe Mr.Creosote's mark to market bond prices are real. About as real as Enron at 80.