Bonds market
The true bottom of the crisis could be predicted simply by watching a bond market. How much US bonds will global economy able to take before the low-coupon will becomes unacceptable? I expect a bond market crash will follow and the US dollar devalue very significantly. Only when the bond market bubble is deflated could markets truly be considered de-leveraged. That could take 3 or 4 years.
It is important to remember that behind rippling of US Treasury on subject of Bailout/No Bailout of Lehman was self preservation. The treasury simply said no! We are NOT going to risk the collapse of the US Treasury Bond market as foreign investors reappraise the credit worthiness of of US Treasury Bonds and therefore the US dollar in the face of a stream of bailouts of over $30 billion dollars per week!
So, you do not need to be a genius to predict what would happen next with this market under current 'plan' by Paulson & Clowns Co.
Gosh, it's the 70s all over again.
It is important to remember that behind rippling of US Treasury on subject of Bailout/No Bailout of Lehman was self preservation. The treasury simply said no! We are NOT going to risk the collapse of the US Treasury Bond market as foreign investors reappraise the credit worthiness of of US Treasury Bonds and therefore the US dollar in the face of a stream of bailouts of over $30 billion dollars per week!
So, you do not need to be a genius to predict what would happen next with this market under current 'plan' by Paulson & Clowns Co.
Gosh, it's the 70s all over again.