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

To: Galirayo who wrote (200347)	5/5/2009 3:46:35 PM
From: Perspective	Read Replies (2) \| Respond to of 306849

It is May, mutual fund outflows have been staunched, the sheep have returned to the markets, and prices are jacked up enough for the CEOs and other frat boyz on Wall Street to rake in one last billion-dollar payday. The rally has convinced everyone the economy is returning to the halcyon days of 2007. Mission accomplished. The only question remaining, I think, is how many hedge funds are uncomfortably short and boiling over. I kind of envision a bag of microwave popcorn; even after you shut off the power, a few more kernels pop. Or maybe a more appropriate analogy is a nuclear reaction. The neutrons fly around, and as long as there's enough fuel left to split, rally begets rally. Once the fuel is exhausted, even a few stray neutrons don't matter. I suspect Government Sachs' $12B from the AIG bailout has been levered and deployed already, but at 10X leverage, every 10% move gives the criminals another $12B equity to lever up. I suspect they're smart enough to know that the exit is going to be a little crowded, though. BC