Zeev's Turnips Patch-No Politics (ZEEV)

[ogm]

This is a repost from another message board. All valid points. And IMO are worth considering.

"I don't think it's quite the same as it was at the last few "bottoms". There are some clear differences now.

The Fed wasn't in a tightening cycle. The level of Treasury supply had not yet hit the kinds of freakish numbers we are now seeing, numbers that will only grow. The FCBs were not having difficulty keeping up with that increase in supply. Fannie and Freddie were building inventory, creating liquidity, not spewing out inventory and destroying liquidity.

Short term interest rates weren't skyrocketing day in and day out. Money supply growth wasn't flat. The banking system wasn't growing at the expense of non-bank financial institutions. They were both growing. The whole pie was growing. Now, the pie has stopped growing. It may even be shrinking. And the US Treasury is so gluttonous, it is pushing everyone else away from the table.

These are huge, cataclysmic changes. If you want to assume that these things can be easily reversed, then fine. This is not an assumption that I would be willing to make. "