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

To: Crimson Ghost who wrote (35878)	7/13/2005 10:26:07 AM
From: russwinter	Respond to of 110194

I would think that with the trade deficit no longer widening, and with pressure on the Yen, that vendor financing is not forthcoming. The Fed will have to be the monetizer now, which means the US can't just export inflation to China. It's also interesting to note that agency spreads over Treasuries are starting to blow out some now, so maybe the big FCB agency buying spree is over, and they are left holding Old Maid cards. The two year has gone to 21 bp versus 15 last week. FHLMC 4 08/17/07 4.030 20.8 FHLMC 4.125 07/12/10 4.245 30.6 FHLMC 4.375 07/17/15 4.486 33.8 That's still too low, but even so with yields moving up, there is no way mortgage costs aren't going up. Combine that with billions in teaser rates coming off every month, and the boiling frog will get pretty cooked. wallstreetexaminer.com