Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (2669)	8/17/2000 3:58:54 PM
From: pater tenebrarum	Respond to of 33421

John, i know...from what one hears from the ports authorities, the trade deficit should set a fresh record. however, the market has ignored the trade imbalance continuously. only once over the last three years has it provoked a sell-off. Greenspan has quite erroneously stated in his HH testimony that the current account deficit doesn't matter as long as the capital account attracts the necessary balance. the Asian crisis has shown this to be nonsense: capital account flows can vanish overnight, to repair a big current account deficit (and this is the biggest in human history) takes years. as noted in my pm to you, the global rate bidding war goes into its next phase: Japan, Australia, Sweden and Norway have all recently hiked. the ECB comes next, with 50 bps. at the end of August. currencies around the globe (except the Yen) have been collapsing against the dollar - the narrowing rate differentials could reverse that process. another negative on the horizon are the upcoming NG and heating oil shortages this winter. if it is not a very warm winter, shortages will be unavoidable. it is simply too late to rebuild inventories in a timely manner. i have taken note of the report indicating increasing margin pressures...either a series of price increases is on the way, or earning expectations will have to be ratcheted downward. not that price increases would show up in government statistics...that is for all practical purposes inconceivable. one must not get complacent over things the market is seemingly not worrying about, like oil, inverted yield curve, current account imbalance, etc. sometimes, something that the market has ignored for the longest time becomes a sudden focus of negativity, like rates and the trade imbalance in '87. aso, slowly but surely the bullish consensus is growing...the level of complacency remains very high, but that has been the case all year long.