well reality is suddenly arriving on everyones doorstep this morning. the cheap money that has provided the boom for the last few years by the greenspan fed is over. most of the major banks and investment houses have made the worst call in history on the prediction of us interest rates. goldman was calling along with all the others for 75 basis points of cuts in 2007 alone. pimcos bill gross has just come out and said for the frist time in 25 years he is a bond bear instead of a bond bull. he also apparently has made more money on his stamp collection than pimco did on their bond portfolio and this guy is the supposed king of the bond market. these are serious statements. this market has not even priced in a rate hike in ths us its now just unchanged. the fact is the fed has created a sleeping monster that has awoken with a bad hangover. the cheap money for hedge funds and private equity groups to leverage and trade will be gone. it amazes me that people on the fed and other politicians that have chosen to ignore inflation when the man on the street was telling them everything costs more. i think the problem they have is they are detached from reality. how do they know how much a pint of milk costs when they earn excessive wages and employ housekepers and the like to do all their shopping. their making decisions based on a life that is not effected by inflation. well the reality hit home this week my friends. i predict a rate hike out of the fed in the next few months and more next year. i predict the stocks will have no choice but to go lower as well. the stocks will typically lag behind until they are 100 percent there is no rate cut although some twat on cnbc was still talking about one last night. the good thing about all of this is that this move is only in its infancy and there is plenty of time to put the right trades on. im buying puts on us treasuries all the way down. if someone like pimco starts and is turning his book around then there is more downside potential here. heres to higher rates and the bond market meltdown.