LIQUIDITY TALK. BILL GROSS GETS EMOTIONAL
[Latest Global Dollar Liquidity Measure: +14.5% annual growth rate; latest Endogenous Liquidity Index: -5.3%]

Concerns about subprime loans have re-emerged, and Bill Gross is bearish once again. That's fine: it's a free country. Anybody has the right to change his or her mind. What got my attention was the article's high degree of emotional intensity. (See for yourself). "Currently", writes Mr. Gross, " 7% of subprime loans are in default. The percentage will grow and grow like a weed in your backyard tomato patch. Now I, the curmudgeon of credit, am as sure of this as I am that the sun will set in the west".

Point taken. I will just say this: I have yet to see a recession with the Global Dollar Liquidity measure growing at 14%-plus rates.