Ian, your #2 is actually the most bearish part of the picture, indeed many of the S&P are in their own little bear market, and if the generals were to take a real dive, a bear market could ensue in 2001.
As for your #3, there is another side of that story, if you look at historical data, consecutive years of budget surpluses have led to major retractions in the economy and in the markets. View a budget surplus as a situation in which the government takes more money out of the economy than it is putting in. Meaning, fiscal restrains are set on the economy. There is also another emerging problem, our ballooning trade deficit. It is now double the rate we used to have just a year ago. We saved the world by being the engine of recovery for the world, but we cannot continue to indefinitely run a $300 to $400 billion bucks annual deficit without this having serious repercussion on the strength of the dollar and our economy. I thin that a readjustment is coming, and because of politics, this will be delayed to 2001. However, despite my bullish bias for 2000, I think it is going to be quite choppy.
Zeev |
