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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (4323)8/2/2001 4:49:20 PM
From: Raymond Duray  Read Replies (2) | Respond to of 33421
 
Hi John,

Here's a couple of opposing views on the benefits/likelihood of the dollar devaluation:

Paul Krugman in yesterday's NY Times:

nytimes.com

And a response from Caroline Baum:

quote.bloomberg.com

<Snip> In his New York Times op-ed column, Princeton economics professor Paul Krugman argues that ``right now a weaker dollar is in America's interests.'' While not advocating intervention to weaken the dollar, Krugman says ``the great dollar decline is coming, and we should welcome it.''

Last (Worst) Resort

If the professor/polemicist would share a few basic facts with his readers, they would see the actual benefits are slim, not to mention the risks involved (a controlled burn often leads to an out-of-control forest fire). Econometric models show that for every 10 percent decline in the dollar, GDP gets a boost of 0.5 percentage point over the next year, Glassman says.

``That assumes no offset from the dollar's decline,'' he says. ``But everything else isn't the same. Inflation would be higher, bond yields would be higher.''

And don't forget the effect that stronger domestic currencies would have on our trading partners, who are arguably hurting worse than the U.S.

``The economies of our trading partners overshadows any currency effect,'' Jim Glassman, senior economist at J.P. Morgan Chase says.

<End snip>

I'm tending to side with Baum on this issue. Though I'm having some difficulty articulating the arguments. I'll get back to you after I've reviewed Stigum's "Money Market", sitting on my coffee table now... :)

This Baum piece from a couple of days ago is good for those who would like to think about the role of the US Treasury Secretary in controlling the value of the dollar. Ms. Baum's conclusion is that Bob Rubin was a master at saying the right things and doing nothing. Paul O'Neil, in comparison, seems to be causing concern, in spite of the fact that he's equally powerless to control the money markets:

quote.bloomberg.com

<Snip> Robert Rubin was everybody's favorite Treasury secretary. He was good-looking, wealthy, affable, savvy, a product of the Ivy League and Wall Street. They ate him up.

It didn't hurt that Rubin succeeded Lloyd Bentsen, the former senator from Texas and probably one of the worst Treasury secretaries in recent memory. Bentsen is credited with guiding the dollar to an all-time low of 79.75 yen, even though the dollar attained that nadir during Rubin's watch in April 1995.

Treasury Secretary Paul O'Neill was hardly a neophyte when he came to Washington in January, having done an eight-year stint at the Office on Management and Budget in the 1970s. Admired for a successful 13-year stewardship at the helm of Alcoa, Inc., O'Neill drew criticism -- early and often -- for the simple reason that he wasn't pre-programmed to recite the Rubin mantra: ``A strong dollar is in the best interest of the U.S.''

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
John,

On a slightly different tangent, do you have a source for information on US Treasury borrowing/budget surplus slippage? I seem to have heard on NPR that the Treasury will be borrowing this quarter, but haven't found any confirmatory news releases among my usual sources. Any help would be appreciated.

R.



To: John Pitera who wrote (4323)8/3/2001 12:58:07 PM
From: Jorj X Mckie  Read Replies (1) | Respond to of 33421
 
John,
since I last posted the P&F chart for the USD, we have
broken through the bullish support line. This after
breaking a triple bottom. So I would expect the direction
to continue. Some support at $114, $111, 109......

stockcharts.com

121.50 | | + | | 121.50
121.00 | | X + | | 121.00
120.50 | | X O | | 120.50
120.00 | | X X O |High| 120.00
119.50 | | X O X 7 O | | 119.50
119.00 | X + | 6 O X O X O | | 119.00
118.50 | X O X + | X O X O X O | | 118.50
118.00 | X O X O +| X O O O | | 118.00
117.50 | X O X O |+ 4 X X O |Avg | 117.50
117.00 | X O X O | + X O X O X O | | 117.00
116.50 | X X O X X O | + X O X O X + 8 | | 116.50
116.00 | X O X O X O X O | + X O X O 5 X + | | 116.00<
115.50 | X O X O X O X O | + X X O X O X O X + |Low | 115.50
115.00 | X O X B X O O X| + X O X O O X O X + | | 115.00
114.50 | X O X O X C X|O + X O X O X O + | | 114.50
114.00 | X O A O O X|O + X O O + + | | 114.00
113.50 | X O X O X|O X + X + | | 113.50
113.00 | X O X O |O X O X + | | 113.00
112.50 | 9 O X |O X X O X + | | 112.50
112.00 | X O |O X X O X O X + | | 112.00
111.50 | X +|O X O X O X O X + | | 111.50
111.00 | + X + |O X X O X O 3 + | | 111.00
110.50 | + 8 + |O X O X O X + | | 110.50
110.00 | + X + |O X O X O X | | 110.00
109.50 | X + X + |O X O 2 | | 109.50
109.00 | X O X + |O X | | 109.00
108.50 | X X O X + |1 | | 108.50
108.00 | X O X O + | | | 108.00
107.50 | X O X + | | | 107.50
107.00 | X 7 X + | | | 107.00
106.50 | X O + | | | 106.50
106.00 | + | | | 106.00
105.50 | | | | 105.50
105.00 | | | | 105.00
104.50 | | | | 104.50



To: John Pitera who wrote (4323)8/8/2001 2:30:35 AM
From: Jorj X Mckie  Read Replies (1) | Respond to of 33421
 
JP, any opinion on how lower oil prices will affect the
equities market? $20 a barrel could happen pretty quickly
if the breaking of support at $26 is any indication.

stockcharts.com

38.00 || | | | | | | 38.00
37.00 || | | | X X| | | 37.00
36.00 || | | | X O X|O | | 36.00
35.00 || | | | X O X|O | | 35.00
34.00 || | | |X X O X|O | | 34.00
33.00 || | | |X O X 9 O X|O | | 33.00
32.00 || | | |X O X O X O X|B X | | 32.00
31.00 || | | |3 O 7 O X A |C X O | | 31.00
30.00 || | | |X O 6 O X |O X O X | | 30.00
29.00 || | | |X O X O X |O X O X O | | 29.00
28.00 || | | |2 O X 8 |O X 2 6 O |High| 28.00
27.00 || | | |X O X |O X 3 X O | | 27.00<
26.00 ||O | | |X 4 5 |1 4 8 |Avg | 26.00
25.00 ||1 | | X |1 O X | O | | 25.00
24.00 ||O +| | A O|X O | |Low | 24.00
23.00 ||2 X|+ | X O|X | | | 23.00
22.00 ||O X X|O + | 9 O|X | | | 22.00
21.00 ||O 6 O B|O + | X B| | | | 21.00
20.00 ||4 X O 8|O + | 8 | | | | 20.00
19.50 ||5 X O X|O + | 7 | | | | 19.50
19.00 ||O O X|O + | 5 X | | + | | 19.00
18.50 || O |C + | X O X | | + | | 18.50
18.00 || |O X + | X O X | | + | | 18.00
17.50 || |O X O X + | X O X | | + | | 17.50
17.00 || |1 2 O X O + | X O X | |+ | | 17.00
16.50 || |O X O X O + | 4 6 | +| | | 16.50
16.00 || |O O X O A + | X | + | | | 16.00
15.50 || | O X O X X O +| X | + | | | 15.50
15.00 || | 3 X 4 6 O X X O |+ X | + | | | 15.00
14.50 || | O X O X O X O X O | + X | + | | | 14.50
14.00 || | O X O X O 7 O X B | X | + | | | 14.00
13.50 || | O X O X O X 8 X O |X X |+ | | | 13.50
13.00 || | O O X O X 9 O |X O X +| | | | 13.00
12.50 || | O O X O X |X O X + | | | | 12.50
12.00 || | O X O X O|1 2 X + | | | | 12.00
11.50 || | O O X O|X O + | | | | 11.50
11.00 || | C O|X + | | | | 11.00
10.50 || | O|+ | | | | 10.50
10.00 || | +| | | | | 10.00



To: John Pitera who wrote (4323)8/9/2001 6:21:40 PM
From: Don Pueblo  Read Replies (2) | Respond to of 33421
 
I'm thinking of getting a million shares of this.

Only $400 and the guy says it is going to go up 25%!

Subject 51582

<GGGGGGGGGG>


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