Date: Thu Oct 02 2003 12:53
trotsky (Apollo@SM) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
yeah, sure, where have i heard that before? : )
note that i remain firmly in the LT bear camp - i agree that the current rally is likely the last gasp. but it's not over until it's over - and imo in order for the rally to decisively end, the bears must capitulate. they refuse to do so to date. no question that the long term prospects remain extraordinarily bleak, and bulls must be very careful. e.g. mutual fund cash-to-asset ratios remain near an all time low...WS equity allocations remain near an all time high, and the polls have just had one of their longest strings of skewed bullishness on record.
but the fact remains that people are WAY too bearish in the short term.
one example: YHOO. it trades close to a new 2 year high - you'd think people must be bullish on the stock, right? wrong. short interest has risen by 28% over the past month alone, to a new record high. out of 13 analysts, only 5 rate it a 'buy'. put/call open interst stands at about 1.15, close to a 52 week high ( 115 puts open for every 100 calls ) . ( info from Schaefferresearch ) .
yesterday's put/call volume ratio on the stock was 1.72, while the stock actually closed UP.
it looks roughly similar to the situation in most market leader stocks - and all those bearish bets will imo continue to be unwound before a top of significance is put in.
Date: Thu Oct 02 2003 12:36
trotsky (mugwump@dollar) ID#377387:
Copyright © 2002 trotsky/Kitco Inc. All rights reserved
sure enough, Japan's experience also exposes the fallacy that a weak currency would stop deflation. recall that the Yen fell from 80:1 to the dollar to 150:1 , a decline of nearly 50%, between '95 and '98. and yet, deflation continued apace. also, looking at this in a US-centric way isn't helpful either - the deflation is going global. thus, CBs all over the world are going to keep printing truck-loads of money - a race to the bottom. whichever currency is temporarily weaker than its competitors will probably dampen deflationary effects in its country of orgin for a while, but it won't eradicate them imo. |
