Really? I need to look at Fox...
Market Commentary
Reliance Trust
3384 Peachtree Road, Suite 900
Atlanta, Ga. 30326
E-mail: kedwards@relico.com
MARCH 28 ~ "When something seems too good to be true, it usually is." This was certainly the case during last week's equity market selloff. Retreating equity prices were the result of overly optimistic assumptions being given a cold dose of reality. The economy continues to struggle, with some of the recent weakness a function of tough weather conditions in February. However, the market remains distracted from economic reports and focused on war efforts in Iraq. Interestingly, action on the battlefield has closely paralleled the action in the equity markets. Depending on one's perspective, the slowing advance could be considered a pause that refreshes or a function of increased resistance. Further ammunition is available to move us forward, if necessary, but psychology remains cautious as participants are worn down by the daily activity and the constant flow of information. It is a battlefield on both accounts.
-- Mark Teichner
Benson's Economic & Market Trends
Specialty Finance Group
2505 South Ocean Boulevard #212
Palm Beach, Fla. 33480
Web: www.sfgroup.org
MARCH 31 ~ The credit bubble created by an over-accommodating Federal Reserve leaves a horrible hangover and massive imbalances yet to work their way out of the system. Citing productivity gains is nothing but propaganda to divert the public from the policy blunders of the past, and present, economic winter. The productivity mantra is being used to give the illusion of prosperity to an investing public that needs hope to soldier on. Only time, bankruptcy, merger, corporate restructuring, and industry consolidation will cure the disease of "bubble induced over-investment".
-- Richard Benson
Quarterly Letter to Clients
James Pappas Investment Counsel
5342 Sandhamn Place
Longboat Key, Fla. 34228
Web: www.jpic.net
APRIL ~ Many people are asking me if I think interest rates are going up, and what effect will that have on stocks and bonds. We all know that bonds will be hurt by rising rates. But if interest rates go up, what happens to stocks? The answer: stocks will go down. I must say, though, that I believe that we have entered an era that will see very low interest rates for a long period of time...The bigger question to my mind is what happens to inflation? Because war is an inflationary act: we build things to explode. This adds nothing to the economy other than the velocity of money...Inflation hurts both stocks and bonds, and rising interest rates also hurt both markets. Can we have high inflation and low interest rates? I cannot recall any time in recent history when those two conditions existed concurrently, and they would seem to be mutually exclusive. I can recall, however, high inflation and a stagnant economy. The markets, though, are emotional, driven by psychological swings, and not easily subject to rational analysis, at least in the short term.
-- Jim Pappas |
