Joey, the euphoria over the Fed buying Yen is simply astounding. Here and in Asia. Doesn't anyone realize that this kind of currency intervention never has the desired effect. Temporarily propping up the Yen will not save Japan, China or anyone else. The Yen will resume its fall and if we try too hard to stop it we will only damage ourselves. We could, of course, debase our own currency, but would anyone here be happy to see a return to high inflation? I don't think so. Do investors really think that a short-term intervention and an assistant secretary on a red-eye to Tokyo will bring about an overnight recovery in Asia?
Hey, they believe in a y2k magic bullet and that MSFT or some other big player might buy Amazon for more than $4 billion, so why not this? The bulls are pulling muscles patting themselves on the back for being such geniuses in picking 'net stocks and predicting further doublings within the year. You can almost hear their gleeful laughter over their newfound wealth while they brag about how much more money they poured in this morning. Yet the Dow hasn't even fully recovered Monday's loss and all the major averages are well below last week's failed rally highs.
Perhaps all the E-Wavers and Jerry Favors fans are right - we just may have one more big up move, putting even the tulip craze and this winter's frenzied rise to shame for their prudence. I bought some SPX puts today when we were up 200+ Dow points and was pleased to see the partial sell-off, but unless some overnight news turns things around, I'm gonna regret it. With Tokyo and Hong Kong up 600+ points each and the S&P futures at a pretty good premium to fair value, this rally should continue tomorrow. Well, we have the trade report and jobless claims in the morning and there's always potential for more earnings warnings (First Call says negative preannouncements are well above average this Q). Perhaps the market will come to its senses... Yeah, right. |
