has it lost steam, page-20

Yes, interesting comments all round. The thing that’s been bothering me for the past month so much is how the public have been witnessing and discussing the recent market events, with many calling the crash and doom scenario as if it’s a given. Make no mistake about it, I was thinking along the same lines for a while at the bottom. If it does crash, it will be the most widely discussed crash before the event rather than traditionally after the event. That’s why I’m giving it a slightly higher preference to thinking this is just a correction of a major secular bull market that’s yet to complete, and of course a disastrous crash to happen later. Besides, the US 30 yr bond yields are still falling. This gives the US Fed plenty of room to ease lots more if they need to. Trouble really starts only well after they have been rising for a long time. Then they have no option to raise rates then until the crash happens. So, the timing of the crash now feels wrong. The debt crisis may eventually turn out to be just a non-event especially given the US government can bail out the sufferers – what’s another few hundred billion dollars more added to the government debt. The real problem may be something else, more likely inflation and much higher interest rates. All just my 2 cents worth and speculation of course.

Time will tell. Take care.