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Non-Tech : The Critical Investing Workshop

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To: Boplicity who wrote (13880)	4/16/2000 10:53:00 AM
From: Jenne	Read Replies (1) of 35685

Quote from the thread... please could you comment? This reverse interest rate position where short dated yields higher than longer dated is the surest sign of recession. 2. What do we have in store over the coming months. I?d change my view if anyone could tell me something good that might happen?.anything but it must be reasoned. 3. Monday....the morning margin calls?the market tanks big time probably as much as Friday if not more. 4. Tuesday ....more margin calls.the market tanks in the 2.45 ? 4.00pm tanking period great earnings announced after the close, probably amongst the best ever. 5. Wednesday..more margin calls and the market tanks stocks tank even after the great earnings. 6. Thursday....the daily margin calls but today is different?..we have a holiday and NO-ONE I mean NO-ONE will go home holding any stock..biggest tank so far. 7. All week building up inexorably we may see the beginnings of a credit crunch as liquidity dries up. We may even get to a point where for most stocks the bid is lowered dramatically and there are still no buyers. 8. Week after Easter.....anyone want to buy stock now.Fed meeting coming up....what do you think they will do.. Well my guess is that now they will be able to bask in the reflected glory of having been proven right all along....Yeessssss it will feel good to them they have shown us the way. Some would say that they have managed to break the back of the greatest bull market in History but that would be unkind wouldn't it. They are after all only doing their job. Will they help, soothe, encourage?..no of course not that's not their job is it or will they put up interest rates again and issue more dire warnings about inflation and the wealth effect and imbalances? What's your guess? 9. Mid May ...no more earnings but plenty more CPI, PPI housing and all the other economic numbers that scare the pants off of investors. IPOs forget it. Maybe the first lay-offs in Wall St. That would be interesting and the stock prices of the big institutions would tank worse then tech. 10. In all this time two things it seems to me will be common:- firstly everything will happen much faster than you expect. The speed will be spectacular and secondly Mr Greenspan and Mr Myers will hang tough and talk tough. Not one ounce of sympathy.( "It's not our job") 11. My guess is that the best we can hope for is a credit crunch that might just if it were to threaten the stability of the entire system cause Mr Greenspan to hold off just a little. 12. Then the summer more Fed meetings and more CPI, PPI numbers to keep constant and grinding pressure on the markets until the last drop of breath has been squeezed out. Then an election and who knows. By that time the recession will be looming large and lay-offs just beginning. We might get some international collapse say in Asia or Europe in this time. The nascent recovery in Japan might just collapse. I don't suppose it would take much especially when the US slump gets going later in the year. 13. One thing might be of real interest is Mr Greenspan going up to the Hill as he frequently does except in the recent past we've always been nervous about him going there because of what he might say that would scare the market. Now the boot will be on the other foot. He will be the one who is a little scared because some of the Members of Congress will be emboldened as one was last week to confront him. When he has to go up to the Hill and explain the Wealth effect and the continual tightening in the face of a full blown recession and the collapse of the markets I want to hear all those long complicated explanations of reallocating risk and corporate risk assessment as we heard at the time of the Russian debacle. It will be most interesting to see him try that lot on the Members later this year as they come up for election. 14. The Japan syndrome. It is beginning to look like a re-run of the Japan syndrome. All even Kevin Landis can say and he was clearly trying was just look back in a couple of years and this period will look like just another correction. None of the major houses have come out and said lets get back in. If a few of them did it would probably put and end to the falls but they haven't so far. Confidence is what supports the valuations and thereby the market and its gone and IMHO gone for a very long time. After a shakeout in Wall St in a few years after massive lay-offs and some collapses and mergers well life will return anew to Wall St and it will prosper again under a new and younger team of people who never knew the Great Depression of the first decade of the 21st Century. Best regards, L

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