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

To: Tommaso who wrote (33966)	7/21/2005 11:31:27 AM
From: mishedlo	Read Replies (2) \| Respond to of 116555

If they stopped buying the bonds for a while, and Japan did, too, the long bond could drop fast, don't you think? That would jack up interest rates for mortgages in the U. S. as well. Housing prices here could stagnate or drop. Housing equity could go to money heaven. Tens of millions of people could be priced out of their houses as their adjustable rate mortgages go up. The key here is FOR A WHILE I am a firm believer that US internal demand will pick up once housing bust is clearly underway. We have actually seen a flight out of treasuries into the junkiest of junk. That to me is insane, and that is what (is fueling the selloff in treasuries) for the most part. Mish