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

To: John Vosilla who wrote (50718)	1/22/2006 1:03:23 PM
From: bond_bubble	Read Replies (1) \| Respond to of 110194

When was there a credit bubble in the past? Did investors/FCBs buy the US bond market, say 1/10th of today anytime in the past history? When was credit created, say 1/10th todays value in the past? In the S&L Crisis, it was the bank savings that was overextended to housing (and NOT bonds). In that case, there was an upperlimit - i.e the savings!! But now, we have entered the limitless world. After the S&L crisis, people were scared of putting money in small banks. After the current credit bust, people (FCBs, foreigners) will be scared of putting money in MBS, ABS and hedge funds. Just as after savings were consumed in S&L crisis - no more new money flowed from the S&L bank. In a similar manner, after the current credit bust, no more money is going to come from ABS, MBS, hedge funds!! Ofcourse there will be some other source but that will not match the ABS+MBS+Hedgies!! Hence the deflation. If you can find a replacement that is larger than these -- you can expect the inflation to continue....