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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (67303)	8/8/2007 12:00:25 PM
From: Incitatus	Respond to of 116555

The government needs to take away all housing profits from J6P in the last ten years because Joe didn't understand the fine print. If Joe doesn't keep his losses, then he shouldn't keep his profits. If the Dems want a back-breaking bailout, then bail it out. But don't launder it through Fannie and Freddie, which have their own problems.

To: Crimson Ghost who wrote (67303)	8/8/2007 1:35:51 PM
From: mishedlo	Read Replies (2) \| Respond to of 116555

From Trotsky on Fleckstein absolutely correct - this at the root of the misunderstandings out there. because credit is used as a money substitute in the financial markets, it acts as an inflationary force in the asset markets (and this spills over into the real world as the imaginary wealth thus created leads to overconsumption and malinvestments), but it is all ephemeral - in the end, it is still credit, not money. as soon as money is needed in lieu of credit, such as has now happened in the CMO markets, it becomes clear that the money simply isn't there.