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Strategies & Market Trends : Waiting for the big Kahuna
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To: epicure who wrote (25407)8/27/1998 9:50:00 PM
From: bobby beara  Read Replies (3) of 94695
 
X, that's funny, I'll put Capt. K in with Ruky, two market ICONS -g-

Here the tale of the tape.

The commodity index peaked in 96 and spurred worldwide growth in production and the "goldilocks economy", because prices were high and profits were there to be had.

Companies geared up to meet the 'Harry Dent in the Head' new era economy and leveraged themselves to the hilt to meet the worldwide demand. However, many of the economies of the world are dependent on commodities for cash flow, unlike the American economy, which is a service & tech economy. When all these economies brought too much capacity on-line to feed this "goldilocks mirage", prices started deflating in commodities. The oil drillers and the semiconductors (you will notice that the INTEL H&S pattern started in early 97 after the commodity prices peaked) were among the first to feel this overcapacity problem and now it is spreading to every sector. Too much easy credit and money growth to fuel a mirage. THIS IS NOT A NEW ERA AND THE BUSINESS CYCLE HAS NOT BEEN REPEALED.

We are now have reached and overcapacity crisis in COMMODITIES, AIRLINES, BANKING SERVICES, YADDA YADDA YADDA.

Just like the 20's when they built overcapacity on the new era ideas - automobile and other great inventions of the day.

In the 20's it was the auto and the highways - in the 90's it's the computer and the info superhighway.

The names & products have changed - but that's all that has changed - human behavior remains the same.
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