Chris Anderson. Re: What to do?
While many are talking about the falling dominos of global economies--Asia, Russia, and Latin America-- I believe what we may have here, particularly if it continues, is a vote of "no-confidence" for much of global political leadership.
We have a U.S. president who is losing his hold on the American people
and hence his ability to lead; a Russian system that is deconstructing, a realization that the IMF policies have been deleterious, a Japanese political system that is sclerotic, and a U.S. Fed that is fighting the last war on inflation.
Now any one or two of those political problems the market could likely
shrug off as it has for the last three years. But right now it looks as if the, "chickens are coming home to roost."
If this is true, Clinton's trip and stabilization in Russia will help.
Rubin's and Greenspan's meeting in San Francisco with the Japanese
Finance Minister on Sep 4-5 could lead to a change in perception. And a lowering of interest rates after the Sep 29 meeting to resupply the
world with more liquidity could all have very important cumulative
psychological effects.
So we could be looking at the end of September before perceptions could change significantly regarding the political situation IMHO.
Meanwhile the economic fundamentals are no real cause for concern.
Economy is good, durable goods orders up 2.4% (good for compaq), hiring plans highest since 1977, a nice tax cut for all from lower oil prices. I think the economy could bounce back in the 3rd-4th quarter, and the Republicans pick up 25-35 seats in Congress.
Longer term limited government, lower deficits, global capitalism are
still on trend. Stay tuned.
HL |
