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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: John Vosilla who wrote (87916)	9/2/2007 6:58:11 PM
From: Hawkmoon	Respond to of 306849

So we can have easily a two trillion hit from the total cost each from just the Iraq war, cramdown of debt from real estate losses in RTC II or a stock market crash. The way I look at it, we just have to watch the 10-year bond. So long as the government can borrow money for 10 years more cheaply than commercial banks can borrow from the Fed short-term, then the Fed Funds rate is too high. This has been the case for the past several years. Secondly, watch the Euro and Yen (as well as the Yuan). The Europeans are suffering even worse than the US when it comes to currency pressures. They are running a ever higher trade deficits because their currency is so strong. This from January, 2006: english.peopledaily.com.cn And the weak USD is making it VERY difficult for Europe to sell in the US competitively. Same thing for the Japanese. So it would appear that pressure upon the Chinese to let the Yuan rise is going to increase. Bottom line, we just can't look at the US economy. We have to analyze the disarticulations that are taking place globally. And the unraveling of the Yen/Dollar carry trade is going to have strongly detrimental impacts upon the Japanese banking sector as they have relied upon foreign borrowers to subsidize their banks balance sheets (they don't have sufficient internal demand for borrower to utilize all the deposits they have). Hawk