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

To: ahhaha who wrote (45360)	11/13/2005 3:28:45 AM
From: mishedlo	Read Replies (2) \| Respond to of 110194

The FED "tightening" hasn't been a tightening. FED has only been taking back the overly generous negative real rate accommodation they had in place for three years. FED hasn't tightened since 1973. Be that as it may, FED tightening rarely affects consumer credit. It does when rates get so high that the economy is thrown into recession, but that is unlikely during this enlightened era of FED engineered perpetual prosperity. Even then, consumer credit only slows for precautionary reasons(the ability to pay), never for interest rate reasons(the ability to pay interest). I disagree. Tell some clown overextended on loans that are about to be reset there was no tightening. Tell that to all of those beating the rush to file for bankruptcy in October. Money supply is damn tighter than anyone thinks. There is still so much money sloshing around and idiots willing to lose it that the FED will keep hiking until they break something. At that point, IMO, money will IMMEDIATELY go from being loosey goosey to incredibly overtight in one fell swoop. I do not know when, but I am sticking to that general scenario. Mish