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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (25626)	12/18/2000 1:57:58 PM
From: limtex	Read Replies (1) \| Respond to of 65232

JW- Well I have had my moments since 1997 it is true and the old timers on QCOM know it. What i have always been scared of is the once in a lifetine bear market that is an investment black hole and sucks everything into it. Take March this year. Most people thought to buy the dips and after the last few years I agreed with that and is if not wholeheartedly enough to say not to panic and immediately run for the exit. Well as we now know this has been going on for nine months and shows no sign of stabilizing. Every time itsort of looks like thats it bang something else goes wrong and the market suffers for another week or so. We get encouraged by the fake rallies and each time we reackon thats it we get proven wrong yet again. Well my worst fear were realized since this is the once in a lifetime crash. I always worried about it and guess what ...it came true. As to a guess for GDP Q4, Q1 and Q2...well lets look at the facts:- 1. The economy is going from 6% odd to consensus 2%(?) in the space of two qtrs. 2. Interest rate adjustments take at least six months to take effect. 3. I can't see Mr G cutting by 1% a time which is needed to stop the slide to recession. At best he cuts by a cautious 1/4%. 4. New President effect ie the economy has to suufer some time so better get it over with in the first year so time to forget before the next election. GW will be haunted by teh expression "It's the economy stupid" so he won't want anything bad in the last couple of years of his term. Also I think he might go for that 'take the medicine now' stuff from Mr G. G might well be able to sell him some that nonsense. I don't think that Mr G gives a hoot about the potential productivity gains that come from re-equiping and wonderful inventions that come with each new NAZ IPO. He seems to be doggedly pursuing the destruction and humiliation of the NAZ even at the cost of ending the Goldilocks economy and prosperity that the US has known for the last eight years. It seems that nothing, not even the almost total absence of inflation will deter him, not even the potential problems looming in the banking industry, nor the flaering economies of Japan, Korea and now even Europe. Nothing it seems will distract him from his goal of teaching the NAZ a lesson it will never forget. So conclusion:- 1. Stopping the economy with that degree of deceleration hasn't been done for a long time if ever before. We are just beginning to realize the damage that the level and term of the excessive interest rates has done. IMHO it can not possibly get better till for a couple of Qtrs so that makes Q3 next year the first qtr that we could conceivably get the results of an interest rate cut. So take the first interest rate cut and then wiat 2Qtrs from it and we MAY start to see something of a tunr around. 2. In the meantime the limping economies of Japan and Europe don't exactly get a boost when the US goes into recession and so they go in as well. As we sit here my guess is that orders around the World are being cancelled thus building the ground for even further warnings next Q ans further lowering outlooks for next year. 3. We haven't yet seen a big increasein unemployment. One thing Mr G understands is unemployment and he hasn't seen it yet. 4. Mr G is liable to be very very cautious and so whatever he does will be too little too late unless of course we get a major US bank or House running into trouble then he will do something and fast because those guys have his home phone number. 5. MSFT warning first time in ten years. That is the economic equivalent of a Tsunami. They are truly global and John Conner warned a couple of weeks ago that they had seen a sudden, dramatic and unexpected fall off in business around the World. All of the above leads me to conclude that the economy is slowing much faster than is generally assiumed. Add to that the multiplier effect of the mutual slowing of the European and Japanese economies and you have quite a mix to the effect that it takes the economy to negative GDP for at least 2 qtrs and more depending on how cautious Mr G turns out to be. Nice words tomorrow could cause a little fake rally but the unrelenting and worsening flow of warnings and bad news will soon ressert themselves on the market. Thats MHO and I welcome anyone who can show me just a little reason not to be so miserable. Best regards, L