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

To: American Spirit who wrote (52973)	6/3/2000 1:57:00 PM
From: UnBelievable	Read Replies (1) \| Respond to of 99985

Stock Market Prices: The Best Leading Inflationary Indicator To the extent that stock prices incorporate a significantly greater expectation for the present value of the goods and services than can be expected to be derived from the companies which they are based upon they represent an ongoing inflationary hazard. At current levels US markets incorporate an expectation of far in excess of anything that the FOMC believes is a sustainable rate of real growth. All representations to the contrary, present Stock Markets prices are perhaps the most significant determinant of FOMC policy. There is a degree of consensus among economists that the market is a bubble, that bubbles burst, and the larger they are allowed to become the more damage they will do. If "They" could be sure that left alone the bubble would not burst until after the election it probably would be "Their" choice to put off the inevitable. Unfortunatley it is clear to "them" that while "they" can refrain from breaking it, they have no assurance that it will not break at any time. No one wants the market to crash. Crashes happen because they can not be stopped. Since there will be pain associated with a soft landing and risk associated with it breaking, having it happen between now and Labor day is preferable to everyone. Both candidates see a meltdown before the election as being very undesirable. We are experiencing, and will continue to experience, everyone's best attempt at a soft landing before September. This undertaking is being made with only two rules: -The landing must be on the ground. -A rough landing is far preferable to a crash. The only problem is that no one has every landed a bubble.

To: American Spirit who wrote (52973)	6/3/2000 2:17:00 PM
From: Benkea	Read Replies (1) \| Respond to of 99985

"that is the experts don't expect more than 1/4 if anything." The "experts" were looking for substantial cuts in rates at the beginning of 1999 along with $5 oil!The "experts" were expecting substantial rate hikes as early as last Tuesday. While I agree that we are close if not completely done with hiking rates, the "experts" are a bunch of mindless clods that make the herd.

To: American Spirit who wrote (52973)	6/5/2000 10:00:00 AM
From: pater tenebrarum	Respond to of 99985

AS, like i said before, i think the Fed's rate policy is not going to defer to election related considerations if inflation data should be worsening...but at the moment the consensus seems to be the hikes are over, and i suspect easy Al and co. will defer to that consensus. they don't like to surprise the markets for some reason, and it is after all THEIR bubble. the result will imo be that they will be forced to hike a lot more at a later stage... regards, hb