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

To: Patrice Gigahurtz who wrote (72562)	3/18/2001 11:16:39 AM
From: StockOperator	Read Replies (1) \| Respond to of 99985

Patrice, I have heard so many numbers battered around the past couple of weeks it makes your head spin: undervalued, overavalued, high pc ratio - low and so on. That's why I don't trade off the fundamentals. In the overall scheme of things they are important but there are too many people using different parameters to gauge them. Regarding margin debt I believe it has been a good contrary indicator for market direction overall. Too much money lined up on the same side of the fence.

To: Patrice Gigahurtz who wrote (72562)	3/18/2001 11:51:33 AM
From: Square_Dealings	Respond to of 99985

I think there has been little if any reduction in overall debt. As of last week margin debt/bank loans were near record highs. This is the line to watch from the Federal reserve weekly data, non seasonally adjusted. federalreserve.gov During the months of February and March mortgage refinancings have been up year-on-year by as much as 300%. The latest report indicating approximately 215%. Last week there were a lot of margin calls on individual investors. The problem and major market risk right now is that the ones holding record debt levels and loans to carry securities are the banks/brokers. The banks are presenting a false picture of stability here because in reality they are sitting on the edge of the cliff. The stock market will continue down as the institutions that dumped tech stocks and moved to "safe" havens like DOW stocks, get killed there too. The credit bubble has only started to implode and we haven't seen anything yet imo. The deck needs to be cleared of the credit exesses of the 90's and its going to take more than a few weeks or months to do it. M.