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

To: TobagoJack who wrote (4350)	6/5/2001 9:31:52 PM
From: westpacific	Read Replies (1) \| Respond to of 74559

The FED is out of control From Russell - Dow Theory (reprint) June 5, 2001 – There it was, right on the front page, right hand column, investors are becoming increasingly bullish about the stock market. In fact, the public is beginning to pile back into equity mutual funds. Here we are with values near their highest level in history, and the public is turning increasingly bullish. What's the incentive? The incentive is that if you buy stocks here they should go higher. There's no incentive from dividends. The basic drive behind stocks now is liquidity. The Fed, flooding the nation with liquidity, is "floating" the market higher. With any luck, the panic-stricken Fed will bring back "the bubble." Question: Russell, why do you say that the Fed is bringing back the "bubble?" What bubble? Answer: The S&P is now selling at above 27 times earnings while providing a dividend yield of 1.2%. These valuations, taken at any other times in stock market history, would be considered "bubble values." Previous bull markets tended to top out at around 20 times record earnings with dividend yield at around 3%. This market is now priced higher than the peak values of any previous bull market peak in history. Yesterday Greenspan expressed the opinion that there were no significant signs of inflation. The implication here is that he has room to drop rates even further. Gold seems to agree. And bonds seem to agree. The yield on the 10 year T-note is now 5.31% while the yield on the inflation adjusted 10 year T-note (TIPS) is 3.25%. The differential in the yields is 2.06, down from 2.21 only a few weeks ago. Furthermore, despite what you may hear, the 30-year T-bond (which is the most sensitive to inflation) appears to have bottomed (Sept. futures) at around 98.13 to 98.15. Over the last three days the Sept. futures have rallied above their previous peak of 100.05. As I write this, the "long bond" (30-year bond) is up 12 ticks to 100.30 on the Sept. futures. The bond market does not appear to be worried about inflation. The fact of the situation is this – the Fed is going to continuing "printing money" until gold and the bonds tell them to stop. This has just NOT happened yet. Evidently, the outside forces of deflation are so strong that they have, so far, nullified the Fed's inflationary activities. What the Fed is doing is extremely dangerous, it's a policy of desperation. In the end, it will backfire on the Fed and the nation. The Fed is intent on holding back the forces of recession, holding back the bear. The longer the forces of correction are thwarted, the greater the danger. The Fed is an institution that is running wild -- totally out of control. The surging liquidity is literally forcing stocks higher. When you buy stocks here you're not buying income, you're not buying value – what you are buying is DIRECTION. That's always dangerous, but there's no sense in kidding ourselves, that's what's happening.

To: TobagoJack who wrote (4350)	6/7/2001 12:10:51 AM
From: Maurice Winn	Read Replies (2) \| Respond to of 74559

<The British, unlike the French, educated themselves out of an empire.> I'm not so sure it's that simple. We need to define 'the British'. If you mean the political system run by parliament in Westminster, it's true that that government and the voters in Britain no longer have an empire. But take a broader view. The effects of British colonisation and empire are still in place in most places such as Hong Kong, Kiwiland, Australia, Canada, USA, Singapore, Gibraltar, India, South Africa and other parts of Africa, across the Pacific islands, the Caribbean, the Falklands, Seychelles, Norfolk Island, Pitcairn [a dozen or two people still there] ... The tentacles of British influence are in China [via USA influence], Japan [via USA victory and influence], Germany [Marshall Plan and NATO influencing much of the rest of Europe]. English [or the barbarian American version] rules the internet, international business, and is growing in leaps and bounds as people see English as the key to the modern mercantile world. The silly Indians in a fit of nationalistic stupidity are keeping the bad parts of the British [Karl Marx] while ditching the good [the lingua franca], although young people are resisting that because they know English is the way to get money from American companies. The British-derived USA economic system is swooping around the world and the technology from those companies is being demanded everywhere. Those demands tie those countries to the British-based international system of commerce. The empire has morphed and infiltrated everywhere. A simplistic old Roman Empire or Mongolian model based on murder and military is not the way to run a modern empire. You, me, and people like us around the world are running the empire now, in English, via the internet and the USA legal and military system. We don't need Whitehall. "The British" more widely defined as those who inherited the empire [me, you, and hordes of us around the world] are running it and profiting from it and extending it around the world, into communist China [CDMA] and into cyberspace. We are unstoppable. We are everywhere. Everyone is welcome [even the French and Tahiti]. Mqurice PS: Being part French, I suppose I've already colonized them...hahaahah!! Nobody can escape.