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

To: GROUND ZERO™ who wrote (76828)	9/10/2007 6:10:40 AM
From: Real Man	Read Replies (2) \| Respond to of 94695

Surf's may be up, even though everything will be done to postpone the inevitable fallout. As far as the credit bubble goes, this is only the beginning of the fallout, which really started to happen about a year ago, even as the DOW rallied from 11K to 14K. The crisis is now spreading to all sorts of debt paper. It would be amazing if the debt crisis did not find its way to stocks as well. While I would say a bear market in stocks is now way overdue, but I don't believe it can proceed without a BK meltdown first. It will happen, maybe this Fall, maybe in January. The question is, how much time can the Fed buy for the dollar meltdown? Who will want to hold on to MBS securities and ANY mortgage-related debt, with rate resets looming large over the next year, starting, you guessed it, this Fall. A cut would not be dollar-positive, neither would a break of the dollar below 80. So, uncle Ben may indeed cut. But if Mr. Market responds by selling the dollar hard, his cut will not help any. In fact, mortgage rates could then go much higher. Got conundrum in reverse?