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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 (74069)	11/14/2006 10:53:12 PM
From: Yulya	Respond to of 110194

In 2001, then Chairman Greenspan and soon to be Chairman Bernanke felt the balance of risk in the economy was toward deflation. At no time during this period did Core PPI drop as much as 0.9%, October's drop being the largest since 1993.

To: mishedlo who wrote (74069)	11/15/2006 8:54:17 AM
From: redfrecknj	Read Replies (2) \| Respond to of 110194

via Between the Hedges: "The Saudi Tadawul Index fell another 5% today and is testing recent lows. Comex copper inventories surged another 4% and are near nine-month highs. Pension and other investment funds poured $110 billion into commodity indexes over the last 12 months, double their 2005 investment, according to a recent American International Group report. Notwithstanding this record infusion of capital and numerous potential upside catalysts, the CRB Index is down 2% over the last year, down 7% year-to-date and down 16% over the last six months. I continue to believe most commodities will fall to levels recently thought unimaginable during the next substantial global downturn." On oil: Middle East benchmark crude oil prices may drop below $50 a barrel over the next few years as Saudi Arabia and other nations boost output to supply expanded refining capacity, Nippon Oil said. A possible slowdown in demand growth led by China may contribute to lower Oman and Dubai oil prices, said Naoaki Tsuchiya, general manager of the overseas business division at Nippon Oil, Japan biggest refiner. In contrast to a widely discussed theory that world oil production will soon reach a peak and go into sharp decline, a new analysis of the subject by Cambridge Energy Research Associates (CERA) finds that the remaining global oil resource base is actually 3.74 trillion barrels -- three times as large as the 1.2 trillion barrels estimated by the theory’s proponents -- and that the “peak oil” argument is based on faulty analysis which could, if accepted, distort critical policy and investment decisions and cloud the debate over the energy future.

To: mishedlo who wrote (74069)	11/15/2006 2:29:59 PM
From: bond_bubble	Read Replies (1) \| Respond to of 110194

I'm not sure, how you can be so sure that inflation is not going to go up. The credit engine is revving at accelerating pace. The mortage refinancing is higher than october 2005!! The rate of introduction to new derivatives is accelerating the money being provided to refinancings!! The gasoline supplies NOW are BELOW last year levels (last year there was Katrina that brought gasoline levels way down - remember shortages?!!). I dont see demand fall off AT ALL but SUPPLY is FALLING!! How can that be price deflationary? Also, the CPDOs and newer derivatives are being introduced at a much faster rate - And because everyone wants to get into it, the risk premiums are evaporating right at the introduction time itself!! (i.e the scope for price appreciation are so minimal and pigmen are piling on it like crazy - just because the leverage is way higher to make that thin profit margin worthwhile!!) Credit (refinance) growth: usatoday.com Residential mortgage refinancing surged to its fastest rate since October 2005, the MBA said. Refinancing accounted for 48% of all applications, the most since February 2005. "Borrowers are proactively refinancing in advance of rate resets," he said Tuesday. "There's a high level of consumer awareness and astuteness." The MBA's gauge of loan refinancing jumped 6.5% to 2,022.2, the group said, adding that its index of home purchases increased 2.7% to a four-month high of 412.9. marketwatch.com Crude-oil futures climbed above $59 a barrel Wednesday, gaining after a U.S. government report showed that distillate supplies have dropped nearly 17 million barrels in six weeks and that gasoline inventories are down more than 15 million barrels in five weeks. Gasoline supplies are now 1% below the same time a year ago -- a reversal "after being well above for almost two months," according to Shankar. Distillate supplies are now only 6% above last year's level, after being higher by "double-digits for much of the past three months," said Shankar. bloomberg.com The most innovative feature of a CPDO is its resemblance to a gambler at a casino, doubling up when bets go awry by shifting chips from the safety of the pile in front of him to the danger of the baize. When times are good and the CPDO is likely to meet its payment obligations to investors, market bets are reduced. When times are tough, wagers increase in an effort to boost the net asset value. ``This intuitively allows any negative performance to be cured by increasing the income from the risky asset to rebuild NAV,'' rating company Standard & Poor's said in a report published last week. ``This strategy could be also viewed as `chasing losses' when it is the risky asset performance that has led to the NAV decrease.