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Strategies & Market Trends : Currencies and the Global Capital Markets
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To: Henry Volquardsen who wrote (911)10/16/1998 11:36:00 AM
From: Paul Berliner  Read Replies (1) of 3536
 
I for one will sit on the sidelines until the package for Brazil is announced, and then see whether I want to go long or short. In the U.S. market though, I don't think any rate cut will stave off the coming recession. Also, there's nothing impressive about a bunch of companies meeting or beating twice-lowered estimates. 4th Q warnings are just around the corner... the smart ones should sell into this rally while it lasts. And check out the construction & industrial equipment Co.s like Deer, Cat and FMC and Case - they're all mentioning in the press releases about how orders are down and they're feeling the pinch from Latin America. These companies have always been like a 'canary in the coalmine' for recessions, and this time is no different. I think the next few years will be quite painful. You know, lowering rates doesn't always stimluate growth - just check out Japan, whose rates were near 4% in 1990. The problem is lax lending standards, and until all the bad loans in the emerging markets are written off, we'll be doing nothing but keeping the patient on life support.
Then there's our own lending bubble to worry about.......
But hey, genius bill clinton gave a speech when all the foreign finance ministers were just in washington. He said "we must find a way to alter the traditional market cycle of booms & busts"
That would be a neat trick.
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