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

To: UncleBigs who wrote (61516)	5/20/2006 10:43:34 AM
From: Crimson Ghost	Read Replies (2) \| Respond to of 110194

PALM BEACH POST reports that the labor market in South Florida is very tight despite some weakness in construction. Many employers having difficulty filling positions and wage pressures are accelerating rapidly. Something for the bond bulls to think about.

To: UncleBigs who wrote (61516)	5/21/2006 1:31:03 AM
From: bond_bubble	Respond to of 110194

Uncle, couple of weeks ago, Doug had an article describing why M3 is an extremely poor indicator of credit growth. So, credit growth is extremely high in US and it is not captured in M3. Secondly, the risk taking stops when the liquidity stops coming in!! Doug's opinion is that dollar crisis will do that (the global carry trade has been the significant credit generator so far). I dont think, Doug is expecting 100000% depreciation in dollar. For instance, Ruble crisis in 1998 was 80% depreciation in Ruble vs USD. Also, nowhere he says, housing slowdown will not have much effect and the financial world can go on. Ofcourse, the MBS and ABSes will have to be cashed in the financial sphere if there is a crash in house value!! This I believe is Doug's opinion as well. What Doug says is that, inorder to keep all the "bubbles" alive, Fed has to keep the interest rates low and this will be checkmated in the systemic crisis!! And avoiding the interest rate hike will continue to espouse bubbles bigger on the margin. i.e just because economy slows does not mean "bubble" will deflate but interest rate has a greater say. Again, as per my PPI theory that I've been saying for so long, UK this month had huge layoffs inspite of housing bubble growing because, the cost of production is causing companies to layoff!!!