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Strategies & Market Trends : Steve's Channelling Thread -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (8796)	12/9/2000 7:31:00 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 30051

Misheldo, if you believe in the basic tenet that next year is going to be a bear market, the financials and brokers are not a place to be long. The banks are going to suffer from credit risks (already their loan to deposit ratio is at an old time high, as per AG comments before them last week). Economic weakness will cause some companies to go under, causing banks in general to have to take on "write downs", the only bright spot might be expansion of the spreads, but these are already at mid recession highs, so a decrease in the the fed rates will not make these much higher (to be expected IMHO, by late Feb. early March). As for brokers, they have two sources of income underwriting fees and commissions (or management fees), during declining markets trading declines and so do assets under management, furthermore, IPO ground to a halt, thus brokers are going to suffer, possibly even more than bankers in a real recession. Wait until late Feb before venturing into these murky waters, and possibly to as late as next October for long term positions, IMHO. Zeev