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To: Terry Whitman who wrote (32825)	10/31/2000 11:09:28 PM
From: LLCF	Read Replies (1) \| Respond to of 436258

< Did you know there's never been a bear market low in the 4th year of the presidential cycle, post 1942?> Is that from the "couldn't possibly be statistically significant" file??? -g- DAK

To: Terry Whitman who wrote (32825)	11/1/2000 12:24:02 AM
From: Perspective	Read Replies (2) \| Respond to of 436258

Interesting point. Contrary to any detractors, the four-year cycle is huge and very real. You can see why by examining the Q3 GDP report. Federal expenditures shrunk by over 10%! Presidents always save up discretionary spending, and, amazingly enough, decide to spend it in Q1&Q2 of election years. They've even learned to take into account the six month lag in the multiplier effect. So, the four year cycle tends to bottom when the removal of this kick starts to bite into growth. One very important thing to note about the four-year cycle is that it predicts lows much better than highs. So, it is projecting a significant cycle low in 2002, which I agree with. I think that will likely be the low for a two-year-long secular bear. We bleed, 1929 or Nikkei style, for the next 12-18 months, with obvious interludes of short-covering and tape painting. The other interesting thing is that, when a cycle low is denied because money is too loose, the low may reassert in between, and the next up cycle is ruined. 1986 should have been a cycle low, but positive feedback engaged and the market ran up through 1987. Look what that produced. And although DJIA recovered quickly, the broad market actually went through a three-year-long bear. In 1998, the cycle low was denied by Greenspan. That will produce a far more significant low this cycle, and probably involve a lengthy secular bear. BC