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

To: pater tenebrarum who wrote (56159)	7/6/2000 5:02:56 PM
From: Tunica Albuginea	Read Replies (1) \| Respond to of 99985

heinz: On Baloons and Bubbles. I agree 100% with all you've said. Let me amplify though. Obviously this is a very large Baloon or Bubble. So as I said, it will be difficult and lengthy to deflate. I think that now we've let some air out so that, as you 've said after some backing and filling in the recent trading ranges (say 1250-1550 SPX), with a few scares thrown in to right the sentiment backdrop, the bubble will embark on the next leg of expansion...beginning from a cycle low this fall most likely. We'll likely have an earnings rally ( good money maker for The Houses ) and then a Fall fall as usual. So that perhaps next year will be the long awaited soft landing or recession as the case may be. Perhaps it will be George Bush to do that. So meanwhile what is going on now is: -Tighet labour markets, however, -dot.coms and others have falling earnings people get laid off and immediately rehired so that they may not even show in the BLS radar especially considering that the BLS's radar is turned unto outer space in the direction of Mars and they are looking for signs of life there I hear. -it's called " creative destruction ". -Saudi Arabia coming to the rescue after having been promised..............something vbg. going to jog now, back later, TA Message #56159 from heinz blasnik at Jul 6, 2000 1:45 PM TA, if you think these baby step hikes are going to cool anything, you are mistaken. it is money supply growth that counts, and that hasn't been dented one bit by the rate hikes so far. you must not forget, we are now a global village...borrowings can be sourced from Japan or Europe at far lower rates (and this is happening in spades) and what's more, the asset backed securities markets have become WS's own money machine....every time the Fed taps lightly on the brakes, the GSE's issue more of their paper, and the banks step up their lending for securities purchases and real estate...someone always hops into the breech. during the first quarter it was the WS houses' turn. everything is thrown into the battle to keep the bubble afloat...and the Fed aids and abets, after all, what choice is there? we have seen what happens if money supply growth so much as slows to a 6% annualized rate (NAZ minus 40%). so this will continue to the bitter end...the pyramid of leverage will grow even larger, until the natural saturation point is reached. my conclusion is that after some backing and filling in the recent trading ranges (say 1250-1550 SPX), with a few scares thrown in to right the sentiment backdrop, the bubble will embark on the next leg of expansion...beginning from a cycle low this fall most likely. regards,