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Strategies & Market Trends : Classic TA Workplace
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To: JRI who wrote (25283)12/21/2001 5:14:22 PM
From: pater tenebrarum  Read Replies (1) of 209892
 
the interest rate question requires a lengthy reply, as we have to consider historic precedent, which tells us that DESPITE our entering a deflationary era, the rate question is NOT clear cut.

please send me a reminder pm and i will post my reply on this thread next week.

regarding inventories, let's not forget that sales are falling even faster. therefore the inventory/sales ratio remains at a level suggesting further retrenchment is coming. EVENTUALLY there will be an imo uncharacteristically anemic upswing based on inventory rebuild, and you're right that it will be hailed as the big recovery and result in a fairly decent rally. but i think based on my post bubble inventory cycle theory that this phase will be much further in the future than Ms. Swonk seems to think. my estimate is that it will begin in the spring of 2003, exactly three years after the asset bubble peak.

regarding Siegel, i'm speechless. i for one believe that we have the preconditions for the worst post WW2 depression in place, and that is clearly at odds with the majority of economic guessers, who to a man seem to think it will be the shortest and shallowest recession ever. i can hardly wait to hear them explain what happened after the fact. i thought Siegel was a contrarian too.

here's a most interesting article on the heroic assumptions of today's buyers in the stock market. i highly recommend it, and agree with it almost 100%:

hussman.com
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