Most income investments seem to be up a bit today.
Could this mean that the "GREAT INCOME PLUNGE AND INTEREST RATE PANIC
OF 2004" is over? (0r, is it short covering!)
Well who knows;
Perhaps, the older carry trades are all closed now;
And, it's time to put on new ones; albiet at HIGHER YEILDS!
Even has the Fed Funds rate has not moved!
So, it seems that a new cycle of carry trades could be in the works.
As I have said, this entire episode seemed a market event, not a
macro-event.
AND, CONSIDERING THE VAST OCEAN OF MORTGAGES OUT THERE AT VERY, VERY
LOW INTEREST RATES THAT WOULD PLUNGE IN VALUE IF RATES ROSE? MUCH TO
THE GRIEF OF BANKS, HEDGE FUNDS AND MAYBE EVEN FREDDY AND FANNIE?
THE INCOME SHOCK OF '04 COULD BE OVER.......until? Hmmmmm......?
The more I look at that wonderous 308,000 number, that started this
mess, the more I think it was a total fudge!
At first I thought it was Dubya & Co trying to goose their
pending "ad buys." Because, of course, Dubya really, really, really
needed that number, BAD! And, "needy" politicans tend to get what
they want.
But now, I think the Fed could have "cooked it up" somehow too!
Remember, that the JOBS HOSANNA only started up about the time that
the Euro was a "sure thing" to break 130.
AND, EURO 130 WOULD BE CERTAIN TO CAUSE A LOT OF RE-THINKING IN THE
MARKETS.
IN SHORT; EURO 130 HAD TO BE STOPPED AT ALL COSTS!
And, surprize! It was! Yet again, our mysterious "deus ex machina"
force was with us!
The Euro plunged! Gold plunged! Even oil plunged, and on the very
same day of the bomb attack against the House of Saud--to boot!
(That was good.)
NOTHING COULD STOP THE ALMIGHTY DOLLAR THAT DAY! NOTHING!
NOT THE TWIN DEFICITS! NOT THE LOW INTEREST RATES!
NOT THE INCREDIBLE "GUNS AND TAX CUTS" POLICY OF DUBYA & CO!
NOT THE LOOMING CATASTROPHES IN IRAQ, AND PERHAPS EVEN IN
AFGHANISTAN! AND MIDDLE EAST CHAOS IN GENERAL.
NOT THE DECLINE OF WAGES!
NOT THE PLIGHT OF THE STATES AND LOCAL GOVERNMENTS, GROANING UNDER
HUGE UNFUNDED EDUCATION AND MEDICARE COSTS!
THE DOLLAR, TRIUMPHANT!
FOREVER!
P.S. Or for about a month, whichever happens first.......
