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

To: mishedlo who wrote (68534)	8/20/2006 1:24:16 PM
From: John Vosilla	Respond to of 110194

'The timing I speak of is when the bubble of debt atop the consumer finally topples; or when the dollar finally plummets to new lows sparking gold to $5,000 an ounce, or when rates will rise dramatically due to a weak dollar or fall (my firm’s view) if the economy eventually weakens? With all of this debt outstanding, what on earth keeps these bank stocks (BKX) levitated?' Yes about the only rational answer is very low long term rates in a period of rising inflationary trends keeps cash flow multiples on most assets expanded way beyond where they should be. Multiple at 5% 10 yr is 20. The multiple at 7% 10 yr is only 14. A 33% haircut if other variables remained the same.