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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (32931)	5/15/2000 8:47:00 AM
From: Les H	Read Replies (1) \| Respond to of 42523

Much of the 'liquidity' is debt and sector rotation. With the Nasdaq having dropped $ 2 trillion in market cap, one would expect a cash buildup. It appears much of it was fluff, from retail margin debt, hedge fund borrowings, and other institutional leverage. The sector rotation is also very thin. The value sectors that have moved up are rewarding mostly only the largest stocks. I've noticed most of the financial stocks are doing poorly, yet the largest stocks like C, AXP, GDW, MER, etc. are doing well. The oil sector is probably the broadest non-tech sector advance going. Since many of these stocks are in the NYSE, the breadth may be appearing better than it actually is. Much of that fluff ain't coming back. People had their chance to refinance homes in 1998 and pull out cash to buy stocks when the interest rates were dropped. My mortgage rate dropped 2.5%. That together with the elimination of the capital gains tax on real estate appreciation probably provided that one-shot big boost of liquidity.