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

To: valueminded who wrote (72196)	12/22/1999 11:45:00 AM
From: Knighty Tin	Read Replies (3) \| Respond to of 132070

Chris, Rates are only one tool the Fed can use, as you mentioned. Jawboning is the one tepid and ineffective other means that AG has tried, and I expect him to continue to do that. But, mainly, he can make it known to banks that cash will not automatically flow when then have losses on speculative loans. AG has been loath to that, but I believe the current silly levels of the Nasdaq, especially, will force his hand. The higher bond rates and the huge trade deficit are also problems he has to address by reducing cash in the system. This will be after the new year as he does not want to the Y2K bug to be fed by an absence of cash. Just as he as turned on the faucets to a skyscraper fire level, he can and should turn them down to a trickle and kill the stock market overnight. The question is when he'll stop making excuses and do what is necessary or, in your scenario, when the bond market will force him to move out of denial. I think he wises up before bonds and the trade deficit force his hand. I feel like that guy in 1929, "Sell 'em all" Smith. It is hard to look at any tech stock without saying that it is grossly overpriced. Currently, I am looking at the chip equipment cycle and have to say that they are ripe for a downturn. Equipment orders are up due to double ordering of chips and once that becomes apparent to the dim wits at the chip cos., orders will dry up as they did in 1997-1998, when the stocks dropped 2/3s of their value. Basically, pick one, pick them all. AMAT is the best co., but it is also the most overpriced. I kind of like PRIA. Great technology and their first profit is due this quarter. When shareholders discover that profits will not be recurring, the stock should lose about 75% of its stock price. All of the internuts are gonzo, but I am concentrating on the cos. a year or so after their IPOs. As new scams come to market, folks will take cash out of these old flim-flams to pimp the new. Names like Portal, Exodus, Vertical, Vignette, etc., ad infinitum, are begging for far out of the money put buying. I don't expect anyone to follow me on these, but I see an opportunity akin to when I was buying puts on dogs like Shiva, Ciena and Ascend in the telecom area and everyone thought they were bullet proof. And, of course, the MUEI report proved once again that the pc market is in deep gazpacho. Dell and Gateway will be the biggest winners on the downside, though I worry about GTW's accounting tricks. I will play it, but very cautiously. Compaq is raising its plug-ugly head again, and there is absolutely no hope here. PCs are just one of IBM's problems and the stock has already discounted the preannouncement. Then there are the dummies who are lending all the money on this tech crap: C and CMB are my favorites here. And, of course, I hate Mexico and Brazil, so I have bought 1st thirds of puts on MXF, TBH and TMX. More will follow if these doomed countries dare to stick their heads out the window for my scoped sights to get them between the crosshairs.