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

To: wanmore who wrote (44052)	10/18/1999 1:46:00 AM
From: Real Man	Respond to of 94695

wanmore, Last year every foreign country rushed to buy dollars because of the crisis. US treasuries were up. So stocks were actually 20% undervalued relative to 10-year note at the bottom. They are still 33% overvalued relative to 10-year treasuries now (the FED model). They were 48% overvalued this past July. They were 34% overvalued at the market top in August 1987. I have no idea what happens next. Last time around the FED eased 3 times. This killed the bond market rally, and ignited stocks. We were very close to a meltdown, and it indeed would happen (I think) if the FED did not ease. It seems, no matter what the FEDs do now, the market tanks. If they ease (they won't), the bonds will tank (initially) and take stocks with them. If they tighten (which they must do), stocks will also tank. Now they can only print $ to buy stocks directly. I don't think they will do this. Where will the money come from to buy this market? -Vi