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

To: jimmg who wrote (76667)	12/26/2006 4:25:17 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

You couldn't be more wrong, you are the one who has the cart before the horse. The horse driving this is fictitious capital from CBs, which in turn leads to distorted, wild risk taking, and then sillier and sillier loan to J6P as the cycle goes on. Ultimately, if you offer silly credit to just about anybody, enough will take it regardless of ability to service and pay back. That gives cart before horse observers like you the impression it's the natural order of things. It's not, as all it takes to change the dynamics are somewhat tighter credit conditions. One cause could be when FCBs, Downey, FNM, et al get caught holding a bunch of defaulting ABS crap that had been trading at par.

To: jimmg who wrote (76667)	12/26/2006 5:21:22 PM
From: Mike Johnston	Respond to of 110194

The vast middle class didn't get a home equity loan because a fcb bought agency bonds" If the FCB did not buy those bonds, J6P would not be able to take the loan, because the interest rates would be much higher and the equity in his house would not support any borrowing AND the home theater system made in China would cost significantly more.

To: jimmg who wrote (76667)	12/27/2006 9:41:43 AM
From: Real Man	Respond to of 110194

Here is a repost from Bulldog on prubear - recent stuff on market statistics. The statistics used to calculate probabilities is lognormal distribution. The post is on the statistics for the number of 2% down days for SP500, and the number of 1% down days for SP500, and the mathematical probability of what's transpiring in the markets, were they free. As for me, I believe him, since I observed the same strange activity on 1-min charts for the DOW. In the past 2 years, I have learned how to take advantage of these weird moves. Ho-hum. I have no idea where 15,000 eminis per minute purchases are coming from, I can see them hitting the tape, but this guy claims they are coming from one account. He used to be a floor trader, the one mentioned in the link, who observed unusual futures activity coming from one account 990N in 2004, it's his words posted here, and discussed on other forums regarding 990N (just google it) dailyreckoning.com "All time record, last -2% down day (S&P) 5/19/2003; 941 net working days; 6.28 standard deviations away from the norm; 1 in 72,679,684; or put another way on a normal distributional basis 99.999998624099700% median number of days between -2% down days is 13. We have had one -1% down day since mid July."