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Politics : Idea Of The Day

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To: IQBAL LATIF who wrote (19090)	7/29/1998 8:36:00 PM
From: James Strauss	Read Replies (2) of 50167

The Market... IQBAL: Excellent Post!!! There are two things that stand out for me... 1. Hidden behind the market Run Up to new highs was the fact that more stocks were Declining than Advancing... 2. The FED can't lower rates now (as they should), without causing currencies around the world to plummet, especially the Yen... So we have a situation where Alan Greenspan fakes concern about possible inflation to cool down the markets and to misdirect our attention from the real need for a FED interest rate cut... The fallout: 1. The economy doesn't get the stimulus of lower interest rates that it needs... 2. The IBM's, MSFT's, DELL's, etc., can't keep carrying the whole market... There is a limit to how high a multiple even the most zealous investors will accept before taking their money off the table... 3. $401K money will be shifted from equities to money markets... This will take the fuel away from the market price rise masked by the few big caps... 4. Market momentum will reverse as those with profits in the big caps sell to protect their profits... 5. A continuation of the correction or BEAR Market darkens our investing horizons... The key to all this right now is the FED cover up by turning attention away from the real need for a FED rate cut... Jim

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