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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Lee Lichterman III who wrote (48007)	7/7/2000 9:03:30 AM
From: pater tenebrarum	Respond to of 94695

Lee, quite right - there is a broad consensus that we will break out of the triangles/consolidation zones to the upside. the complacency as evidenced by the Rydex ratios and sentiment polls is incredible. re: slowdown, don't forget, the broad aggregate M3 is back to an annualized growth rate of 9,6%. this is not a tightening cycle, it's a liquidity pump party. the Fed is extremely loose, printing as fast as it can. if you look at the Q2 credit growth data, they are incredible...credit in this economy grows five times faster than the economy itself, as leverage is piled upon leverage. in Q2 specifically bank credit has been simply exploding, partly fueling the real estate bubble that is taking hold in several regions (most notably of course CA). how can there be a slowdown with money supply growth so excessive? it seems to me that the Fed, fearing a collapse of the credit and asset bubble, is trying to support it with ever more credit creation, which is indeed a precondition to keep it going. what this means is that we will find out where the natural limit of the expansion of the bubble actually lies. it also means that we will eventually have another big rally well into 2001...perhaps after a little fall scare this year to right the sentiment picture? regards, hb . PS: of course, should the economy suffer a surprise mid-air explosion (as opposed to a soft/hard landing) all bets are off...:).