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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: sidney-8 who wrote (51595)	5/22/2000 12:22:00 AM
From: TheKelster	Respond to of 99985

Where not to invest. U.S. CIGARETTE exports are down 25 percent, with 50 billion fewer cigarettes sent abroad in just one year. That is 2.5 billion fewer packs of cigarettes exported each year. The number of cigarettes sold per person in the United States fell a record 8 percent last year, according to government data and to a Worldwatch analysis that also cites per-capita declines in some of the heaviest smoking countries: France, Japan and, markedly, China, whose 1.25 billion people now smoke one-third of the world?s cigarettes.

To: sidney-8 who wrote (51595)	5/22/2000 2:41:00 AM
From: westes	Respond to of 99985

He proves the overvaluation of assets. He proves the problem with easy credit. But he makes no argument at all about why the market crash should be uncontrollable, nor does he even propose a specific mechanism for it. There are a lot of differences between then and now. One big difference is that there are so many smaller players in the market. In 1929 the stock market was a rich man's game, and it involved less than 2% of the population. Today, over 40% of the population is sitting on the sidelines waiting to prop up the market as it hits each new support level. In 1929 most of the money in the market was smart money, so smart that it all came out at once and all refused to go back in, creating an asset collapse. Today, much of the privately invested money is dumb money, and those people are only too ready to keep the market levels up and provide support. In any case, I acknowledge that had this collapse occurred during an economic downturn, we would be in a very serious pile of doo-doo, that no amount of Fed Interest rate drops could undo. Fortunately, that is 100% not our situation. We are in an economic up cycle, and that makes all the difference in the world. It buys the Fed time. It buys time to increase rates, slow growth, burst the bubble, and stabilize the asset mess before any downturn in the business cycle materializes. I don't think he makes a convincing case for depression, and I don't believe that the facts now support that conclusion.