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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (2027)	2/21/2001 8:46:05 PM
From: tradermike_1999	Read Replies (1) \| Respond to of 74559

This is the countdown to doomsday. I am leaving my office tomorrow and going out of town. I have one position right now - a short position in Amazon - and have a buddy who is going to look after it for me. I'll be back Sunday, but won't be here when the financial collapse of 2001 takes place. Hopefully we'll get a bounce tomorrow or Friday so I can short the next rally. This is a complete disaster. A TKO knockout that took the Nasdaq down, the DOW down, and the S&P 500 down. This isn't just a Nasdaq or tech stock selloff. EVERYTHING is falling and nothing has hit the ground yet. There was nowhere for the average investor to hide. The only thing up today was tobacco and gold and silver stocks as the goldbugs came out on the inflation news. We got a scary market situation with the Nasdaq closed right on above major support. Time to buckle the seat belts tight. Right now futures are Naz futures are down 35. People sweating bullets tonight. Today the CPI numbers came out showing a .6% increase in consumer prices. Economists had expected a .3% rise. The PPI and CPI numbers next month will be important to gauge whether or not these inflation numbers are a blip or a new trend. The trade deficit numbers came out today also and once again they broke world records: $369.7 billion dollars flew out of the United States and into foreign countires. This has been the trend every year since the 1998 Asia Crisis. At the same time the US manufacturing base has shrunk under the competition of cheap labor and trade barriers broken down by Papa Bush and Bill Clinton. The wages for the average American stagnated during the 1990s. Most middle or lower class people had to take two jobs to stay afloat and pay off their credit cards. The prosperity that came was due to Greenspan hyperinflating the money supply which went into the stock market. Wealth got built on paper and people thought they were rich in a so called new economy. But it was all a big bubble. A legacy of so called "free trade" and a Federal Reserve Chairman who believed it was his job to bail out international bankers and hedge funds when they made poor investment decisions. Free markets for some and government intervention for the big money people. If inflation accelerates then we will have a situation in which prices are rising, the economy is in a recession, and the Federal Reserve Chairman is printing money like mad in a desperate attempt to keep the stock market afloat. Most of these tech stocks will NEVER go up to the highs they made a year ago. Their technologies are no longer new, but just a regular part of life. They are no longer growth stocks or growth companies. Don’t listen to the analysts use common sense. I went to Sears yesterday and looked around at the computers. I bought a top of the line computer a year ago that cost me around $1800. The same type of computer was on sale for $600. The computer is no longer a revolutionary product. It is just another big ticket product like a television or a refrigerator. Stocks like DELL, CPQ, LNUX will never be what they were. All the companies have now is a buildup of inventories and a price war on their hands. Refrigerators, microwaves, and televisions are at discount prices at Sears. So is Gilder’s Telescom microchip revolutions. Semiconductor companies are in the same boat. A 128 RAM chip costs half as much as what it did a year ago.There are similar stories throughout the technology sector. That is why when the next bull market comes there will be new leaders. The once hot tech stocks will never be as hot as they were. That’s why I don’t care about bottom fishing. I can’t predict what technology or product will be hot years down the road. But I’m smart enough to know that it won’t be the computer. That’s why trying to buy on the bottom for the long haul is stupid. For one thing no one can even get it right. But even if they can they don’t know if what they are buying will ever be as hot as it was. I'm glad to get out of town and take a break, but in some ways it will be funny going to Las Vegas. Everyone partying as the country goes down the toilet. Rumors circulated today in the morning that Greenspan would cut interest rates. He failed. His panic stock market bail out in January failed. Will he press the button again if the market continues to meltdown? It failed the first time. It won't work now and he'll just make the inflation situation worse. The only thing that will cure this market and economy is time. And there will eventually be a wonderful buying opportunity for the long term investor when this is through. If he cuts rates now then he is crazy for sure. We know he screwed up. Anyone can. But if he cuts rates to bail out the stock market, after these signs of inflation, then he is completely lost it. He needs to sit back and just let things run his course. He has caused enough problems playing with the interest rates these past 3 years. What does he think he can do, cut interest rates every few weeks to keep the Nasdaq above 2000? He'll just make things worse. It'll recover quicker if he would just stop until the debt problems work themselves out and the inflation picture is more clear. It'll be tough times, but Greenspan can easily make things worse if he continues to make mistakes.