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

To: BGR who wrote (80555)	5/11/2000 5:47:00 AM
From: Earlie	Read Replies (4) \| Respond to of 132070

Hi BGR: Short term, you may well benefit from a bear market rally, (I cleared some profitable short positions yesterday as I am expecting a bounce), but the answer is "yes", I think it an unwise decision. Keep in mind that between now and the end of June, a large number of companies have to clean up their accounting (per the SEC's threat of "public hangings" for those who do not comply by that date). I expect one of the worst "warnings" periods we have ever experienced over the next month or so as companies try to take some of the sting out of the nasty impact this will have on their reported numbers. As well, take a look at the consumers' multi-month pull-back in his borrowing activity. While there is plenty of liquidity available in the system, consumers are already starting to pull in their horns (due, I think, to the smashing of the perceived value of their stock portfolios and to the heavy losses experienced by those employing heavy margin). Consumer borrowing is the fuel that has driven the U.S. economy. It appears to be slowing rather dramatically, and I think this will now accelerate as the bear market takes an increasing toll on the "dippers". If I am accurate in this assumption, this bear market will pick up momentum over the next few months. Profits have been falling across the board now for 12 quarters. The accounting clean-up will exacerbate this, as will the slowing consumer borrowing-buying binge. On the basis of these two facts alone, I think being a bear provides much better odds. I note that many of my broker pals are already beginning to experience what I warned them of many months ago, which is a massive increase in suits. Every dumb jerk who pressured his broker into buying all those rocket-ride, e-commerce or dot-com stocks, is now taking that same broker to court, as a result of staggering losses. It is an epidemic. It's going to be a Darth Vader picnic this summer. Best, Earlie