Bill,- SPECULATION - I bet that Japan will come out with a credible plan to tackle the "bad loans" and give the FED the room to raise rates. A.G will issue a statement that will keep the market in check as he has done in 1996. Rivlin gave the signal on CNBC last week.
Workers start to strike for no real reason based on all kind of pretenses. GM is a good example. This is inflationary.
The manufacturing economy is weak, but the consumer gained it's confidence and oil will start drifting up. All a mixture of inflation.
Raising now by 1/4% will chill the markets several hundred points, get the selfconfidence out of the window for several months, chill the buying power of many and cool the consumer. Any delay will only make the coming slide down worse, and leave the FED with less flexibility.
Then the FED can ease again to restart the manufacturing going and trim the trade deficit.
A prolonged growth pattern can be achieved with stocks doing 20% better than bonds - e.g. 6% x 1.2 = 7.2% a year and not 30% as it is now.
The casino effect is a pyramid scheme and not productive. Just look at the market cap of AMZN, YHOO, and others or even KO MSFT, LU, CSCO, DELL.
Stock market manipulation those days is so obvious that I just wonder were the SEC is and what are they doing about it.
BWDIK
Haim
On a side note;
At least KO and MSFT are monopolies, but DELL, LU, CSCO have great PR departments and IBM,MOT, HWP, CPQ and other can manufacture same products not to mention Nortel, Siemens, Ericson, Alcathel, NEC, Hitachi and many others.
Also keep in mind that the TCI AT&T deal is a mirrage out of desperation as Sprint has the true telecom answer. Besides there is no money to implement the new vision as the client will not pay today prices. Yes digital on fiber will come to your home in 5 years but at a dirty cheap price and low profit margin for the supplier. The magic number is $750 investment per line/household and not $2000. |
