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

To: fedhead who wrote (38894)	6/9/2000 6:26:00 PM
From: pater tenebrarum	Read Replies (2) \| Respond to of 42523

Anindo, i'm not so sure that the rise of the most speculative sector can really be interpreted this way. after all it was the rise and subsequent demise of this sector that spelled the end of the Naz bull run in early March. there are signs that margin leverage has once again increased, after being dented only a little bit in April, so the very situation that brought about the initial collapse is in the process of being re-established, albeit at lower levels of stock prices. it seems to me that the casino mentality has returned to some extent, but the fuel for it (easy money) has been vastly reduced with an increasingly hostile monetary environment globally. a recent slight coming in of credit spreads has left those spreads at levels that are still way above the panic spreads seen during the Russian crisis, and while there are various interpretations of this phenomenon, i'm leaning toward the idea that a vast increase in default risk is being priced in. interestingly, as soon as the market showed signs of a revival of liquidity, corporate borrowers rushed in with deals, eager to get money as long as it's there. once again, corporate America is financing stock buybacks by increasing leverage on its balance sheets even more. this is craziness of the first order... i'm not saying the firmer tone to the market can't continue for a while yet, but i wouldn't bet on a large advance either...sentiment indicators are totally out of whack again, and that means upside is limited, in time as well as price.