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

To: Sea Otter who wrote (72596)	3/18/2001 5:55:30 PM
From: jmootx	Read Replies (1) \| Respond to of 99985

Sea otter Many of us who think the ice is thick where we stand better think again. Nearly every S&P 500 company from CSCO, GE, Citicorp, and the like have issued millions upon millions of stock options to executives and employees. This will force pressure on every stock in the S&P as fear of becoming 'not ready for retirement' replaces fear of not becoming rich. the leading edge of Baby Boomers are now 55, and many have huge interests in stock options. The fear of working to 75 will certainly play a role for the million or so of vice presidents, senior account executives, senior managers, and the like. The John Rockefeller's, Carnegie's, and Vanderbilt's had a significant amount of assets in land, cash, and gold. Of course this led to the top income tax rate going to 90% in the early middle 20th century. But what about this crises? If Warren Buffet, Bill Gates, and the like have 95% of their wealth in stocks, and the minute they file with the SEC to sell shares becomes quick public knowledge, then we have a quick run on the 'bank', i.e. stock market. Remember just because Buffet owns 200 million shares of Coke, does not mean it is worth anything in this bear market. As we on this thread know, there has to be a market to buy any amount wanting to be sold, the heavier the sale, the quicker the price will drop. Then what about the 10,000 hedge funds who will put more pressure on the market by shorting the stock. The wealth will evaporate with no means of distribution for programs like 'The New Deal'. So this will have to play itself out. Remember, there are no stats available to the public on the impact on share prices of minority interests wishing to sell in a bear market. We are seeing the result right now in NASDAQ, declining at a faster rate than the DOW in 1929-1932. Equities are as liquid as an ocean, and the perfect storm is on for ALL stocks with large amounts of outstanding stock options. Keep away from the big money center banks. I see a credit crunch as bankruptcies on credit card debt accelerate. The last large regional bank to issue credit cards is Bank One, and they have been hit hard.