New US Economy Policy Message Board

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Strategies & Market Trends : New US Economy Policy

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To: Mr.Manners who wrote (21)	4/5/1997 4:45:00 PM
From: Arthur Tang	of 435

Thank you, Kasha Market is overbought for many years because of increasing short interest as published by NYSE. FEDS action favours all companies becoming bankrupt; and therefore no buy back will be needed. From 1970s to today, borrowed stocks caused the crashes;and money going into the market disappeared, because of valuation which is below the true value of great companies. Now the new economy created jobs and demand side economy boomed; 401k money created a vast shortage of stocks to satisfy the investments. Stocks were probably sold more than once to the same buyer; the correction is in the making. Wall street needed FEDS to raise interest rates repeatedly, to bring overbought to oversold condition. But, alas, cash positions being quite strong prevented mass panic to a sell off. The market lost money for everyone; those shorted borrwed stocks as well as those 401k funds. So, market will reverse itself now and wait for another day for FEDS to help those who borrows stock to buy back. Some day some companies will print more shares and this borrowed stock account will be settled correctly.

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