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

To: CalculatedRisk who wrote (68590)	8/21/2006 6:22:03 PM
From: russwinter	Respond to of 110194

But now you are also seeing lower demand for C&I loans; this suggests that investment spending may be falling ahead. C&I lending looked to be stalling a bit from June 7-July 12, but then picked right back up. 04/12/2006 1087.0 04/19/2006 1097.4 04/26/2006 1103.6 05/03/2006 1113.4 05/10/2006 1115.6 05/17/2006 1120.6 05/24/2006 1116.5 05/31/2006 1118.4 06/07/2006 1126.8 06/14/2006 1125.8 06/21/2006 1120.3 06/28/2006 1124.1 07/05/2006 1133.1 07/12/2006 1127.2 07/19/2006 1134.6 07/26/2006 1134.2 08/02/2006 1155.0 08/09/2006 1156.6

To: CalculatedRisk who wrote (68590)	8/22/2006 12:31:25 PM
From: bond_bubble	Read Replies (1) \| Respond to of 110194

The house prices have crashed about 50% in Australia: smh.com.au Yet, Australians are paying high price for Gas and the inflation is still highly positive (4+, i.e non-gasoline are also high in price)!! OfCOurse, Nouriel Roubini might think Australia is an exception. He thinks falling house price will pull down inflation. I think he is living in a fantasy world. Lot of the people are thinking US is the centre of world growth and so once US economy slows, inflation will stop rising. As Andy Xie quoted in his latest article, if the export market slows for China, the excess liquidity will continue to be absorbed by fixed investment in China (fixed invest. is currently bigger than export market)!! i.e ChinDia fixed investment marginal growth will easily make up for the marginal fall in imports by USA. At this point, I think, as Doug Noland said, only a systemic risk (i.e US defaulting on all the mortage bond held by ASians/world) can reverse inflation. Deflation will be CHOSEN. Australia is a clear evidence that interest rates rise, house prices crash and still you have inflation!! This is why, Central Banks choose credit deflation (i.e they do not print money at lower rates inspite of economic stress).