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

To: bond_bubble who wrote (66562)	7/21/2006 3:57:21 AM
From: shades	Read Replies (1) \| Respond to of 110194

Hence rate will go high to defend the dollar from commodity inflation. Bernanke won't do that til after the election eh? He has some favors to repay no? AG didn't want bernanke did he? Defend the dollar - I hear everyone saying time for dollar to fall so american workers can be competitive again - you don't agree? What is more important to american and chinese politicos? Strong dollar or happy employed voters? Ofcourse, interest rates fall in both countries after some years. But it was late by then... Bernanke said the problem back then was they didn't loosen fast enough eh? That he won't make that mistake. I do agree that if all past credits are liquidated, Fed rate can fall to 0%. But, such a credit deflation means SS, Medicare defaults as well... Well kotikoff and others have been saying we got to nip this entitlement problem in the bud eh? hehe Did you leverage your house yet and short XLF like you promised?

To: bond_bubble who wrote (66562)	7/21/2006 8:25:49 AM
From: mishedlo	Respond to of 110194

Just one more thing that might prove my case. In 1929, after the stock market crash, Fed lowered the interest rate and the stocks recouped 75% of the losses by 1930. That tells you assets reflate if the rate is lowered in time doesnt it? I am not sure that it says anything. IF it had that effect it would have been temporary at best. I suspect it was a normal rebound that failed, much like the Bernanke BS of the last two day. Huge Naz rally. 100% given bank now. Did Bernanke cause the rally or was the market so oversold that it rallied because it wanted to? I think the latter. I think the same way about 1930. Jobs collapsed. Where was the stock market going to go? Mish