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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 671.91

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Nov 14 4:00 PM EST

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To: Crimson Ghost who wrote (50505)	5/12/2000 10:32:00 AM
From: pater tenebrarum	Read Replies (1) of 99985

George, well, re. CRB and the dollar, see my previous post. that's exactly my argument. the dollar will become the next driving force for the CRB index. thanks for posting the Roach article. this is also my view - an overheating economy at the end of a long expansionary cycle is an extremely dangerous animal to handle. while Roach doesn't specifically mention this, the main danger lies in the pace of credit creation right at the tail end of the expansion cycle. credit demand has been exploding, and the whole private sector is at its most overextended debt/equity ratio in history. THIS is what makes a 'soft landing' so unlikely. see also the savings rate chart i posted here recently. the savings rate has made a downside blow-off that coincides with the blow-off move in the current account deficit. both imbalances can only be corrected by a sharp economic slowdown. a mere return of the savings rate to its long term mean would engender a painful recession. regards, hb

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