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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (74484)	1/30/2007 11:31:20 PM
From: Real Man	Read Replies (1) \| Respond to of 94695

Nope. It really can't happen again! -g-

To: William H Huebl who wrote (74484)	1/31/2007 2:43:27 PM
From: Real Man	Read Replies (1) \| Respond to of 94695

We should see some weakness by the end of February, if the current liquidity trend by the Fed continues (or, should I say, lack of liquidity?). I have to warn that the discontinued M3 is now growing at 12%, which means the housing bubble may re-emerge, just like it did in Brittain with 14% growth of M3. That bubble popping is a major concern to the Fed. (Given that inflation is underreported, I doubt it's even a nationwide bubble) Now, we should have some weakness in late February/early March, provided that no coupon passes re-emerge. I am confident the coupon passes WILL re-emerge, though, as soon as we see a little weakness in the markets. The interest rates still have room to grow, and could probably get to May 2006 highs by late February. If the dollar drops below 80, and the rates break May,2006 high - then watch out! :-O We could be moving into real mess, the currency crisis or crash. If that happens, then we might see a derivative meltdown. It's all currency and credit derivatives - so I watch these two markets only. The spreads in the credit market are still extremely low, the risk is very underpriced, although we are seeing frequent blow-ups in the subprime mortgage business. These are quickly papered over by the Fed at this moment.