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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: William H Huebl who wrote (43665)	9/27/1999 7:08:00 AM
From: Skeet Shipman	Read Replies (3) \| Respond to of 94695

Bill, Here is my perspective of last week. While the week began with uncharacteristic optimism for global currency and price stability, events unfolded which disappointed markets. Tuesday's trade report came in as expected; yet, the business news had not publicized the revised expectations. Expectations of intervention did not materialize, nor were it needed. The capital surplus imbalance and productive deficiencies of the US, and the effect of oil prices on the trade deficit began to be realized by the market. Theoretically trade and capital balances will stabilize the dollar yen. Unfortunately, erratic capital flows can so over weigh trade flows it puts this mechanism in question, at least for short periods of time. I am not passive about Saudi Arabia and OPEC's responsibility for oil price and supply stability at this time. Saudi Arabia's flush policy in 1997-98 contributed to the global recession and subsequent production cuts have contributed to getting us out of it. It has regained for them a renewed degree of global production control. If oil supply levels even approach critical levels, it should be viewed as an act of war; and appropriate action taken by our government. That said, the possibility for a warm winter will probably maintain price stability. Despite dropping again in August 2.8% home sales remained strong. More disconcerting is sales prices resumed their 12 to 15 percent annualized rise since March with a 1.25% increase in August. Combining this with the coming effect of the dollar decline and oil price rise indicates, yes, inflation. I haven't even thought about this coming week. I viewed last week was the policy deciding week. Skeet