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

To: mishedlo who wrote (42566)	9/29/2005 12:01:05 AM
From: ild	Read Replies (2) \| Respond to of 110194

Mish, sorry, you'll have to rewrite your blog again. -g- Message 21746787

To: mishedlo who wrote (42566)	9/29/2005 12:35:11 AM
From: russwinter	Read Replies (1) \| Respond to of 110194

Here's an essential read and model towards gauging the consumer real estate ATM downturn. prudentbear.com Here's the source for M-1 data: research.stlouisfed.org And here's non M-1 component of M-2: research.stlouisfed.org We have this condition already in place. M-1 peaked at 1398.2 on May 30, 2005, and is at 1337.4 on 9/12. We have a “vacuum” condition where consumption and debt service drains money out of the M-1 money supply faster than the consumer replaces it with income. Consumers must now resort to increasingly large real estate debts to manage their money needs. This in turn forces more reliance on refinances, and as that avenue is cut off home sales (explains all the inventory and new listings). Non-M-1 of M-2 is still growing but not as much, late innings?: July 18: 5189.7 Sept. 12: 5219.9 If M-2 starts to decline, it could occur because home resales (and refi equity extractions) slow substantially and eliminate an important source of consumer money supply creation.