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

To: edamo who wrote (33458)	3/14/2001 1:53:07 PM
From: Venkie	Respond to of 65232

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To: edamo who wrote (33458)	3/14/2001 6:08:37 PM
From: FR1	Read Replies (2) \| Respond to of 65232

Edamo - I have been listening to one guy who goes by the name of “ahhaha” and is very bearish. I would like to get your thoughts on what he has to say. Some comments listed below. He (correctly in my opinion) feels that the FED needs to get out of the headlines and stay out. That is not controversial. What does bother me is that he basically seems to feel that any encouragement such as lower interest rates will cause dramatic inflation and cause collapse in the markets because the FED will be forced to push rates back up. Do you think this is the case? He also seems to feel that the tech problem is overcapacity and will not go away for several years. I note that most tech businesses (particularly semi & optical players) seem to continue to say that the last half of the year there will be a recovery. WCOM restated today that its earnings projections for the year are still good. In the Tuesday conference, Chambers (CSCO) on the one hand said orders were way down and there is no visibility. Then said, in the same speech according to WSJ, “he hasn't changed his opinion that the overall network-equipment market will increase 30% to 50% annually over the next five years.” The whole thing confuses me and the "last half of the year" starts in 3 months. How do you feel about a turn around in the next few months? Could it be that a lot of this is sell off is done to help force the FED to give a hefty cut on Tuesday? If the markets are hammered you get rewarded and if they are up you get punished with a small cut. What a crazy system. CNBC saying today the market has factored in a 100% chance of a half point cut and a 60% chance of a 3/4 point cut. Does that kind of talk set us up for another plunge after tuesday? ********************************************** Message 15501155 The amateurs on the MDD thread talked a lot about the "diamond formation" of the DOW. The Dow has a broadening top, not a diamond formation. However, the DOW utilities have a diamond formation and that is about as bearish as is possible. It portends rising interest rates and implies FED has 0 latitude to lower interest rates. ZERO. They already squandered their ability to act by chasing windmills with the money creation which Greenspan says doesn't matter. Message 15501059 On CNBC Art Hogan at Jeffries claimed the tech earnings problem is one of demand, but my friend quasar_1 will tell you that it is one of overcapacity. More demand won't lift earnings. It would only slow the effect of built-in overhead. quasar_1 has been complaining about this for 3 years. He said, "how does anyone make any money"? It is unwise to argue against what quasar_1 has said even if he got tired from saying it for so long that he quit all this nonsense in frustration. It has taken the stock market all these years to figure out. When was the last time MSFT sold any software directly in scale? They have the sweetheart deal with box mfgers. If the boxes slow, MSFT's earnings must slow. MSFT has tied themselves to others unnecessarily, or maybe necessarily in light of the ever increasing saturation of the PC market. Message 15495012 Important breaks in DOW utilities and Dow transports today indicate that the trouble is now spreading. The utilities are indicating that short term interest rates as determined by the market are bottoming. Evidence for this should be seen soon in the Eurodollar market. Why would market rates rise in this environment? FED pumping. The Ny Fed is a loose cannon. Today they did another coupon pass. We are leaving the transition period which started 9/1/98 and ended in 1/2/01 thereby entering the long cycle of intrinsic inflation.