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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 670.21-1.1%4:00 PM EST
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To: Zeev Hed who wrote (61860)11/4/2000 3:15:06 PM
From: Gary Burton  Read Replies (1) of 99985
 
Excellent article near last page in Barrons this weekend by Joe Carson, one of the better WS economists imo--He graphs the relationship between gdp growth and liquidity growth going back decades-says that graph shows strong correlation between the 2 and that given that, economy should continue to weaken materially in 2001 since liquidity graph has decisively turned down-says that the opposite was true in late 98 so the stock market boomed again but that 'this time it's different'---translation-- beware the overloaded side of the boat where everyone is now camped in order to participate in the 'obvious' seasonal rally phase Nov-Apr....Let's see now---GOP sweeps all 3 on Tues---WS initially uneased by no longer having a divided Gov't--followed quickly by the perception taking hold that Fed will now resist longer in lowering rates because of Bush' mega tax cut stimulus--meaning longer time for eps weakness etc etc etc----To many peoples'surprise, we may find ourselves in the position that the worst thing for the stock market is going to turn out to be the GOP winning big on Tuesday, thereby staying the Fed's hand. They won't ease in mid Nov and they won't ease until at least after the State of the Union address in late Jan when Bush lays it out and they likely won't ease for some time after that even as the economy weakens.--that megatax cut idea may turn out to be Greenspan's worst nightmare.
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