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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Boplicity who wrote (67803)	1/27/2001 8:30:11 PM
From: Haim R. Branisteanu	Respond to of 99985

Gregory, US and western Europe wages are around 10 to 11 trillion of which 10% to 15% go into pension funds insurance companies and directly in the stock market. This includes corporate investments and personal investments. So we can be assured that as long as unemployment stays relatively high, money is flowing into financial assets including corporate debt. Further close of those 10 to 11 trillion are taxed at above 20% which further supports the transfer of national debt (which is contracting) to corporate and personal debt. On issue difficult to understand for many is the positive effect of the velocity of money and fast inventory turnaround that is occurring all over the world. Further more and more countries world wide adopt more legislation for pension funds, tax exempt retirement plans and 401K alike programs IMHO many compare this recession, and we are in the middle of it to a recession 20 years ago were money velocity was 1/10 of today and inventory turns 1/3 of today or even less. The keys are with the FED who admitted before the Senate panel that they fell asleep in guiding monetary policy in the mist of controversial elections. Swift move from the FED by lowering interest rates and hopes of stable oil prices will restart the US economy. The blame is squarely on the FED they pumped to much money into the system in 1999 and tightened to late and again forgot to lower interest rates in September. In a nutshell they are still behind the curve in reading the tea leaves of the economy probably because a faulty BLS system. Further the Bush team inflicted substantial more damage to an already sliding economy by talking it down. Also it will be a mistake to lower taxes well before substantial national debt was paid down. I hope the chicken head will get it. As to the IT sector we are very very far from saturation, the issue is that the scam bags on WS have run the stocks way ahead with out discrimination, and issued 5 and 10 year debt fro equipment with half the life span. This will be worked out at the same relative speed as the RTC (assuming same money velocity ratio) even that the recent problem is far less severe then the problems facing RTC. Remember a communication line does not need the maintenance expenses of a building and the usable bandwith is only expanding. Most US based analyst can not understand the globalization view ........... no wonder they are so busy pushing stock that they do not have even time to read more less to understand. BWDIK Haim