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

To: TobagoJack who wrote (5420)	6/28/2001 10:12:03 AM
From: Hawkmoon	Read Replies (2) \| Respond to of 74559

Jay... I'm pretty much trying to trade in and out on position trades whereever I see an opportunity to make a point or so. And I have a couple of special situations in the pennies that I am holding which I've followed for some time, one which is restructuring with some top notch management, and the other I wound up being a "bag-holder" on several years ago, but has promise of straightening itself out over the coming months. I don't do any FX trades (don't have the ability to watch them close enough), or many options, but I watch the macro-economic trends as closely as possible in order to develop a sense of where we're going overall, or what sectors to look for opportunities in. The primary filter I apply for judging the viability of the US markets, is that there just aren't many places overseas that aren't more drastically impacted by a US slowdown than the US itself. Thus, the FED has more bullets available that do either Japan, or the ECB. The fact that the dollar is excessively strong also gives AG room to move rates down to '92-93 lows, if necessary. Japan, as I've suggested before, is more a demographic problem, more than just a liquidity trap. They are a xenophobic society that has little ability to import labor to maintain their tax base. Thus, when their demographic "boom" is deflated by a low birth/high retirement rate, consumers go into a different mode of spending and saving habits. Combine this with their Kireitsu cross-holding system yet to be unwound and their consensus form of government (in)decision making, AND the major competitive challenge from cheap Chinese goods, and we can see major restructuring that will necessary, but inhibited by social concerns. I may be wrong, but I think the US can avoid much of this "post-bubble" pain due to our multi-cultural society that was built upon global "brain-drain" and incorporating immigrant labor into our citizen base. Thus, as a current worker retires, labor is available to replace him/her. Additionally, the way the IRA/401K system is structured, any distributions that have been tax-deferred for years, will be taxed as income (exception: Roth IRAs). Having a sound tax base makes for a sound governmental fiscal policy and a strong currency. It provides far more leeway to deficit spend, should it prove necessary. These are a few of the variables I'm looking at. In sum, the US has its problems, but it's the only major game in town, imo. And you can't underestimate the leeway the US government has should it opt to stimulate the economy throug deficit spending. US national debt vs per annum GDP is far less that any of it's competitors. Hawk