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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 680.59

+0.6%

Dec 19 4:00 PM EST

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To: sidney-8 who wrote (51444)	5/21/2000 4:28:00 AM
From: Stcgg	Read Replies (1) of 99985

Crash and an Over-heated Economy.. You can't have both a strong 'overheating' economy and a crash in the markets (my contention). According to Galbraith (the great crash 1929), the '29 crash preceded the downturn in the economy. So according to Galbraith you are wrong about this. Our overheated economy has caused the Fed to rase rates which in turn create lucrative money markets for investors to park their dollars.. Once investors perceive the stock market to be overvalued and too hi-risk, funds flow out of equities and into the safety of bonds and CD's now providing higher returns.. Once equities lose over half their values and investors perceive a crisis, panic and wealth evaporation ensues.. Once the stock market contracts, the lenders of margin and peripheral debt backing that paper fails.. Once the financials fail, the dollar crumbles.. Once the dollar crumbles, it's all over.. Recession, real estate declines, bankruptcies, and depression follow.. >><<

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