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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 680.28

-0.5%

Dec 1 4:00 PM EST

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To: Amelia Carhartt who wrote (38602)	1/30/2000 3:12:00 PM
From: pater tenebrarum	Read Replies (1) of 99985

Susan, rates really don't matter...what matters most to the market are apparently the FOMC's back-door liquidity additions, or the lack thereof. i have always been highly critical of the whole share buyback issue, especially if, as is the case, it is done using debt. normally corporations should make use of elevated stock prices by raising capital via equity, not retiring equity in favor of debt. it's extremely illogical and can only be explained by the current manic climate... note that a great many of the practices currently so beloved by WS will go out of the window once the party's over. ever wonder why the Japanese bear market has been so prolonged and deep (aside from the obvious problems of Japan)? it's to a large degree due to the practices that serve to drive prices higher during a bull market having the opposite effect during a bear market. to stay with buybacks, like you say, the share price may well fall, but the debt on the balance sheet unfortunately remains... i know, in the new era, debt is like oil...it just doesn't count.<ggg>

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