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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (19077)	7/1/1999 3:19:00 PM
From: Lucretius	Respond to of 99985

the fools are dancin.. dance w/ them

To: pater tenebrarum who wrote (19077)	7/1/1999 5:55:00 PM
From: Michael Watkins	Read Replies (3) \| Respond to of 99985

At the risk of being sued for copyright infringement, I present the following: -------------- COCOA BEACH, Fla. -- And today we drop a jaw at yet another fetching set of NAPM numbers. We see, and do let's hum while we gawk. See the Purchasing Managers Index (or PMI). See it go. It has risen steadily (and tacked on 11.7 points) since it bottomed in December; its second-quarter average of 55.0% goes down as its best since the third quarter of 1997. Its January-June average of 53.5% typically corresponds to gross domestic product growth in the 3.5% area; its June reading of 57.0% typically corresponds to GDP growth in the 4.7% area. See it dump cold water on the half-baked notion that the economy is now slowing (or will soon slow) permanently and materially all on its own. See the prices index. See it go. It has risen steadily (and tacked on 22.4 points) since it bottomed in December; its June reading of 53.5% goes down as its highest since October 1997. See it point to continued upward pressure on the core (excluding food and energy) intermediate producer price index (which, coincidentally enough, bottomed in January). See the export index. See it go. It has risen steadily (and tacked on 11.0 points) since it bottomed in October; it has posted five straight expansionary readings in the wake of 14 straight contractionary ones. See it point to a world economy up out of its deathbed. See the new orders and production indices. See them go. See them rise to their highest levels since July 1997. See the former point to even stronger orders for durable goods; see the latter point to even stronger industrial production showings. See them both point to an overall economy even more unlikely to falter now that the factory sector is back on track. Anyone Else Smell Fish? Which brings us to the most intelligent question to surface in the wake of yesterday's FOMC announcement (and here your narrator paraphrases Paul Kasriel of Northern Trust): Given that a 5.5% federal funds rate could not slow an economy growing at 3.5% a year ago, what in the world makes Greenspan think that a 5.0% funds rate will slow an economy growing at 4.0% now? One does wonder why the Fed continues to pump away full force. Think about it. Growth is positively soaring. And what is it that facilitates such robust economic performance? It is liquidity. In one form or another, it is money; it is money and credit that make the economy go. And right now we are awash in both. Bank lending is growing at a 6.3% year-on-year rate; the M2 measure of the money supply is growing at an 8.0% rate and the M3 measure is growing at an 8.6% rate; and the monetary base (currency plus reserves) is growing at a 9.3% rate. All of those measures are growing faster than nominal GDP (which is currently growing at a 5.1% rate), and all of them have been doing so since at least the first quarter of 1998. So again. Why? G. Love says he wants the economy to slow; he says he wants to protect against the potential emergence of inflationary forces. Yet yesterday he opted for action that is exponentially more likely to produce precisely the opposite result. By holding the funds rate at a level even lower than its 1998 average -- by agreeing to keep pumping at an overly generous pace -- he provided both the grease for even speedier economic growth and that much more kindling for a price spark down the road. Why? Too much a slave to shares? A hostage to the big, bad brokerages? Just plain old bank coddling? Or wait. Surely it's not something crawling to the surface of a dark hedge-fund lake. --------------

To: pater tenebrarum who wrote (19077)	7/2/1999 9:48:00 AM
From: bobby beara	Read Replies (4) \| Respond to of 99985

>>>>Bobby, i'm not a bear<<< Oh my gawd, only Haim is left -g- bway.net Heinz, i just flipped my lid and my propeller beanie just wen't 180 degrees to starboard, watch out rough seas ahead. I believe the five waves in the XCI from late may is terminal. 10 day put/calls .47 9 day spx rsi 72 Top of the LA Sunday bus section: "Has the U.S. Economy Entered a Gold Era? This along with "Smarter Bull" and the announcement of the worlds tallest building in Chicago are powerful contrary indicators. People are way too bullish and all the earnings have already been priced, notice the profit taking on some recent good earnings reports and then there is SBUX, must have been that failed internet strategy everybody was looking for at the turn.-g- This is another Greenspam bull trap, just like the one he did in concert with the HK bailout of their stock market last fall. Government intervention never works, the markets need to work off their own excesses, this is a mega bull trap from last fall to lure an even greater % of J6P money in, the crash we are now going to have is going to be much worse. I'm going 200% short today, and if we do happen to rally more, i'll average down. Disclaimer: If you can listen to a Motely Fool, you might as well take financial advice from a guy wearing a propeller beanie -ggggggggggg-