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Strategies & Market Trends : Analysis Class for Beginners

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To: Arthur Tang who wrote (629)	10/21/1997 4:42:00 PM
From: Arthur Tang	Read Replies (1) of 1471

Last week many investors got very uncomfortable about Wall street when reasonably heavy decline in indexes happened several days in a roll. Retracing 1987 crash and trying to analyse the logic and reason, failed to find the culprits. The truth of the matter is that those guru's claiming they foresaw the clash then; now are saying that crying fire in a crowded theater may have caused the crash. One by one they are now bullish rather than fearful of another crash. Why? Wall street is now more aware of ebb and flow, action and reaction. Specialists and market makers move prices up and down to control run away enthusiasm. Liquidity on hand, supported by central bank, prevents any meaningful run on Wall street. Will it happen again, the formula to prevent another crash is rehearsed each and every october. For ten years since president Bush used the formula, only 1989 got close to a mini crash. Last year, July interest rate scare, scared away the crash in october. The new economy is controlled in fine details. Economy slow down is accelerated by obsolescense. Replacement and recycling maintained the economy. Companies are refocused and re-engineered for efficiency and high profit margin. Inflation is controlled by surplus capacities and speedy productivity. Shortages of products can not happen because inventory to supply mass distribution is twice the demand per year. If you ask me, it will be a blue moon for some thing unpleasant to happen. But then I am the architect of this new economy.

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