Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: valueminded who wrote (70856)	11/21/1999 6:16:00 PM
From: re3	Respond to of 132070

chris a technical analyst in my area has suggested much of the same as you have...run up to jan/feb, then we have the sell of a generation... ike

To: valueminded who wrote (70856)	11/22/1999 8:43:00 AM
From: Earlie	Read Replies (2) \| Respond to of 132070

Chris: Keeping in mind the self-imposed nick-name, herewith my current thinking. As I noted earlier, I expected that if we managed to slide through October, we would have a "relief rally" in celebration. Some celebration! Through Christmas, we enjoy the usual "don't worry, be happy" attitudes that come with the season. Y2K will not be the "end of the Western World as we know it" scenario that some see, but merely a very few, very isolated nuisance irritations. The whole Y2K thing will be forgotten within a week or two. Might this be the cause for further "celebration"? Could be, but beneath the surface, the significant stockpiling that has occurred this year across many industries (think of it as dragging year 2000 sales back into 1999), is definitely going to lead to a slowing in the U.S. economy. How nasty it will be is open to conjecture, but I personally think it will be consequential. The stock market sector that has been taken the highest, the PC/semi sector, is probably THE most vulnerable to this slowdown, particularly as business has now stopped buying and the consumer arena has been totally saturated except at the very bottom end of the sales curve where price is everything. and margins are non-existent. It has been a few years now since we have had any new applications, and Comdex is showing us that there are none currently on the radar screen, so there is nothing to propel buying. In a nutshell, the whole sector gets creamed so badly on earnings next year, that even Gerstner-type accounting won't hold the air in the balloon. Consumer and corporate debt levels are high (understatement) and leave no room for even the tiniest cloud, so I suspect that as soon as it becomes apparent that the economy is slowing, many consumers cut off their manic borrow/buy activities (they borrow now because they feel richer, due to engorged stock portfolio valuations). Once the spiral gets underway, the Fed will do its normal thing, but as was learned in 1929,"pushing on a string" isn't effective. Already, the U.S. dollar is under pressure, and U.S. treasury selling is expanding. No wonder bond prices are under pressure. As bond yields continue to rise, more dough gets sucked out of the markets, even as those higher interest rates take their normal toll on "profits" (I use the term loosely here),... a double stick in the eye for this bloated tulip. Margin levels are grotesque. Once the selling starts (and in a way, it already has, as older pros are quietly taking to the exits), margin pressures will exacerbate the descent. Timing is a tough call, but Greenspan's term expires in the Spring and like Robert, Alice, "Mr. Yen", et al, he is likely to say "sayonara" and depart before the whole thing collapses. My speculation is that it all comes together in the late Winter/early Spring. Best, Earlie

To: valueminded who wrote (70856)	11/22/1999 10:51:00 AM
From: Mike M2	Respond to of 132070

Chris, rather than attempting to time the markets demise -extremely difficult with a historic mania condoned by the Federal Reserve and the plunge protection team I am watching events. At some point the dollar will be hurt enough to have a prolonged adverse impact on the stock and bond markets. In addition, a steady expansion of the money supply is not sufficient to sustain a bubble - it must expand at an ever increasing rate - at some point either the currency markets or the credit markets will stop the insanity. The bigger the boom the bigger the bust TL & EV cannot be avoided -only delayed Mike