Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: basho who wrote (88559)	11/6/2007 6:44:44 PM
From: benwood	Read Replies (1) \| Respond to of 110194

Surely GST knows that. He wrote this brilliant bit after all: Message 24027707 So I'm sure if I knew what tooearly was referring to in just a couple seconds that he understood as well. But to acknowledge anything 'deflationary' to him is akin to letting the tear-ists win (i.e. Mish). <g> Why, I'm sure I could tell GST deflation is in the cards for my Michelins, and he'd beg to disagree <g>

To: basho who wrote (88559)	11/6/2007 6:47:54 PM
From: GST	Read Replies (1) \| Respond to of 110194

Thanks for you post -- the credit contraction that is upon us has been well presented these many months by Calculated Risk. The common thread is that we have markets that have thumbed their nose at risk instead of pricing it into financial asset pricing. This is exactly what happened in the dot.com bubble -- risk was not priced into stock prices. Now we have something far worse than the dot.com bubble -- we have a debt market that is non-functional because nobody can afford to reveal just how far apart asset prices will be when the real level of risk is priced in -- that is one whale of a predicament. Derivatives which are supposed to make all this go away are like having a robot drive your car -- it works great until the robot malfunctions and then? Then you can only watch in horror as the cliff comes closer. I am not saying we are all going to die -- but the dollar is mortally wounded and will need a long time in rehab and detox. As for debt deflation -- why make up extremely confusing terms that simply mean credit contraction? I can't even imagine real deflation in this environment.