. . . . . . The Phantom, the Bull and the Chairman . . . . .
Very interesting comments, Christopher. Thanks for sharing. . .
That is precisely why I call myself a "bull in bears clothing". . . because I am taking a bearish stance, based on the hype that has been shoved down our throats about how our economy is on the "brink of disaster". . evidenced by the largest point decline week in history. . . . when in reality, you could not possibly compare our current situation with last year on this same date.
Last year, we had REAL problems. . . Asia, Russia, IMF, LTC, etc., etc. This year, we have. . . uh, . . .uh. . .1.] the FEAR of a quarter point hike in interest rates???? . . . uh. . . 2.] the FEAR that MAYBE there may be isolated problems with some companies, come Jan 1, 2000???? . . . 3.] the FEAR that MAYBE we MIGHT be seeing the initial signs of a turn towards inflation. . . from the years we have enjoyed disinflation????
That is it!! And I've got to tell you. . . .I am not scared.
So I remain a bull, with my money on the side, until all this posturing is over . . . and each time I see a bargain, I am snatching it up. . .and when a better bargain comes along. . . I'm trading for it. . . .and aside from a touch of lightening the load for 3 weeks in December, I plan to hold a 100 percent long position through April, when I re-evaluate the markets and economy . . like we did this April.
Handling those fears one by one. . .1.] the market has another 1/4% interest rate hike already figured in. . . so the fear is based on the old adage. . . 3 steps and a stumble. This is not necessarily true. . . Greedzan is a master at his art. He soft-landed our disinflation, as though he were piloting the Luner Excursion Module. Nearly every historical account shows a knee-jerk reaction, which sets up deflation. . . which is FAR worse than inflation to an economy.
That is where we were last October. . .on the brink of the abyss into the downward deflationary spiral. . .which is like piloting an out of control jet aircraft. . .you pull out, or you eject. . .
So the fact that Greenspore makes such a perfectly soft landings on the downside, leads me to believe that he would have a similar light hand on the upside. So the question is this: Why do I have more confidence in his abilities than he?
He was posturing with the banks. . ."brace yourself. . .slowing economy. . .unemployment. . .it creeps up on you fast. . . don't be caught unprepared". . .But there is no meat there. . . and frankly, he needs to keep his trap shut outside of the Fed meetings. . .his words are irresistible to the critical eyes of the markets. . .there is now a science of counting Greasyspam's tips at restaurants, trying to read in some sub-conscious forecasting. . .like fortune tellers. . . gimme-a-break.
2.] As for Y2K, the phantom fear. . .scientists, professors, authors and accountants were absolutely certain that come January 1, 1999. . many of the COBOL based computers that deal with financial data, would begin showing problems, based on the fact that accounting programs look ahead one full year. . . taking them into "00", where they would certainly crash. Guess what? They didn't.
Then this same group of authorities pounded the table that come 09-09-99, we would see mainframe computer systems, that are supposedly still in use in "critical" applications, despite the fact that they are 25 years old and have less computing power than some of today's pocket calculators. . . .suddenly SHUT DOWN. . . because the number "9" is the code for stop in computer languages that have long since been forgotten. . . and where those that wrote the books on them, cannot even recall how exactly they were set up. . . .
But I can tell you this. . .anyone that remembers programming from the college days, knows that when you write a routine, you don't write it so that the system looks to the DATE for instruction on whether to run or stop. That would be like saying that someone wrote a song, that has a virus in it. . . and if you are driving down the road and that song happens to come on the radio, your car will stop running. It is ludicrous. . .and the Y2K "problem" is a phantom problem that was NEEDED and USED for hundreds of different reasons . . . some true, most false. . .but all sold books.
As I have said a dozen times before. . .I believe there will be sparse outages. . but nothing widespread, no network or power grid shutdowns and no planes falling from skies . . no elevators suddenly deciding they are going to go into a freefall [something that is impossible unless lines are cut and brakes fail] . . no prison doors flying open and prisoners running through the streets in anarchy. Huh, uh. . .none of that will happen as a result of Y2K.
Yes, a corporation may lose a system, resulting in a re-boot and perhaps a call down to the archive for restoration of data on the "other side of Y2K" . . and then back online we go. . . .
I believe that some companies have sleek new mainframes ordered to replace those old dinosaurs, which they HOPE fail, in order to justify their new purchases to shareholders, etc. . . and it would not surprise me in the least to learn months into the new millenium, that whatever is the biggest of the outages or failures reported. . . that it is later learned that it was deliberate. . .for some warped half-minded reason.
3.] As for a touch of inflation. . . .I think we have earned it! [yes, you can quote me] All is well with the economy. . .more people are working full-time. . .the working people are bringing home more money . . .with a higher discretionary percentage than in a number of years. . .consumer demand and sentiment is strong. . .the increase in PRODUCTIVITY, due to better communications, automation, just-in-time manufacturing and the many benefits of the the internet. . is off the scales domestically. . .and is just being realized globally. . . manufacturers have been lowering prices for years, based on the ever-decreasing price of boards, chips and cards. . .32" Sony Trinitrons are $600 bucks, for goodness sakes. . . a 300MHz six-giggle-bite fully loaded PC is UNDER $600 bucks. . . or FREE, when you agree to watching ads or signing with an ISP. . .
Are PCs expected to just keep dropping, until they are free-with-fill-up? Or can we allow these great companies to make a touch higher margin rate for a while? . . .[ which translates into better earnings. . .which often yield dividends . . .which comes right back into our pockets anyways. . . . especially with the percentage of Americans investing the markets reaching all-time highs. ]
So what, if we get a touch of inflation and a leveling out? I see no problem there. But more importantly, I have confidence that a LITTLE inflation will not go unchecked and be allowed to grow into massive inflation. . . the methods of checks and balances that Alan has so neatly tucked into that briefcase and that mind. . .WORK WELL!! I am confident he will continue to hold things from running away. . .[it is "run-away" inflation that everyone fears, after all.]
So my biggest fear, with regard to the FED is WHO would replace Alan, should he decide to step down one day and start his own E-Commerce Website. . .like Dr. Koop did. . .
Got financial problems at home that you just can't solve? Visit Alan.com, where the former chairman of the Federal Reserve is standing by to address whatever financial dilemma you have. Just $59.95 per minute, gets you one-on-one attention by this enocomic jeanyus.
Is there a Clonespan waiting in the wings of the Fed, should this ever happen? That is what I want to know.
Rande Is
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(c) Copyright 1999 Rande Is
[Journalists: If you are going to use my original ideas and thoughts in your articles, please give appropriate credit. . . thanks] |
