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

To: russwinter who wrote (59993)	5/1/2006 3:31:36 PM
From: bond_bubble	Read Replies (2) \| Respond to of 110194

Henry Lou thinks repo market is the liquidity generator and that is going to be the source of systemic failure. But Noland SAID (a quarter ago), besides repo, other sources are significant as well (as you also understand it - like deficits, FCBs - though FCB might not be growing the bids). You are clearly seeing the evidence of this .. commercial lending and constructions etc... The junk spreads are staying narrow even now!! But Noland seems to be viewing things differently now ... he is now saying the "shock and awe" should start soon (2 weeks ago article). BTw, what is your take on the positive yield curve? I think, there is lot more commodity and credit inflation that will ooze - may be for 6 more months (just a wild guess)... Do you also believe in a possible conspiracy theory were Fed is "already" heavily monetizing the deficits? Look, China and Japan and are close to trade deficit and not much foreign private money should be flowing into the bond market at this stage .. how does the deficits get paid?