To: pater tenebrarum who wrote (1917 ) 9/8/1999 10:53:00 PM From: Mad2 Read Replies (2) | Respond to
Heinz, respectfully do you believe seriously, after a little blow-off rally that will carry the indices some 30% higher over the next two months that enough inertia can carry the indicies 30% higher . Seriously, I think for that to happen, rates would have to drop a good 3/4 to full point (and if it does happen I'll eat my shorts....literally). This market is waiting for a reason to sell off. Most know the economy has little room to grow and keep inflation at bay, let alone generate additional growth in corporate earnings. In hind sight the difficulties in Asia, Russia will be viewed as the fuel for our most recent heady times. Granted Americas investment in technology has assisted in improving efficiencies without creating inflationary consumption (eg, pc's, software and the like) Lets remember that we've been the benificaries of lower commodities, loose money and a strong dollar created out of the malase in Russia and Asia. Normally these things don't occur to an economy like ours in the late stage of an expansion, near full employment. It doesn't get any better than this. Everyone knows it but is just waiting for the signs that we don't live in some sort of new economy. Once those signs appear...look out below. Add repaitration of funds, a declining dollar and renewed growth in Asia and Eastern Europe with the associated inflationary pressures they create and it might feel like we've been hit at short range by a double barreled 10 gauge with a magnum load. The only saving grace I see is the income generation and gov't surplus available that will be willing to chase stocks and bonds. If Americans shift towards savings and away from discretionary spending certian items will head for the tank, along with rates....all will depend on the Fed's resolve to keep inflation down and the political climate of the day.
