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

To: Skeet Shipman who wrote (81480)	8/18/2001 5:22:28 PM
From: t2	Read Replies (1) \| Respond to of 99985

Asset inflation is a common phenomena of manias, panics, and crashes. The growth associated with it was unsustainable. Perhaps the Feds only problem was not raising interest rates faster to avoid the bubble. That may be very true...higher rates could have slowed down the rate of money inflows into stocks; making it a smaller bubble--and that small bubble bursting would have prevented the serious financial damage we have witnessed (ie negative wealth effect). Unfortunately, too much of people's saving made it into the stock market just before it burst----a classic bubble. I have my hope on Europe, to lead the economic recovery and not the US like many experts predict. Why? There was no bubble in Europe; peoples' wealth is intact. That would result in an increase of exports (or simply increase in overseas profits) of US high technology products. Just my guess. ------- The unknown after effects of a bubble is makes me take a more cautious approach---and stay more of a trader (near term) than an investor. The market may not bounce much even if the US economy gets better and that is the concern.