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

To: Real Man who wrote (78002)	1/22/2007 6:37:14 PM
From: bart13	Read Replies (1) \| Respond to of 110194

I agree that when the real break comes, little will work. Financially, it will also very likely start in the general derivatives area, like it has for decades. The actual trigger will be something else though. I still think there's at least one more full cycle before the real break, but my certainty is nowhere near 100%. Assuming a rescue is pulled off this time, it will involve most of the major CBs too - not just the Fed. The World Bank, IMF, BIS, etc. will also be working hard behind the scenes.

To: Real Man who wrote (78002)	1/22/2007 8:10:59 PM
From: Tommaso	Read Replies (2) \| Respond to of 110194

As Marc Faber points out, it only take a little liquidation at the margins to unleverage the whole thing. Not everyone has to sell. But as soon as values of assets start dropping, the basis for lending contracts. But this contraction need not affect commodity prices. People will go on paying higher prices for necessities (food, gasoline, electricity) even as they are forced to abandon formerly high-rpiced assets. And with their dwindling cash reserves and meager income they will continue to bid up the prices of essentials.