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

To: Maurice Winn who wrote (8244)	9/5/2001 8:46:06 PM
From: KyrosL	Read Replies (2) \| Respond to of 74559

>>The dot.coms come into the category of pocket money. It's not just the dot.coms. It's the telecoms and the computer makers, and the whole technology infrastructure that is supporting them. And if their collapse triggers the dreaded US consumer retrenchment (as it seems it's doing), it's the old economy companies too. >>The Telecosm and dot.bomb collapse is over. Not quite. Jay's Global Crossing bonds fell more than 10% since he bought them a few days ago. The collapse is alive and well and a lot more of it is coming. When PSINet showed signs of failing a year ago, Exodus was considered to be solid as a rock; now it is near bankruptcy (PSINet went bankrupt a few months ago.) Nobody thought that Lucent may go bankrupt a few months ago; now its bankruptcy is no longer inconceivable. >>Globalisation ... Reduction in socialism ... Capital accumulation Not necessarily good for profits. More competition on a global scale. With cheap and easy information dissemination. How will the QCOMs of the world with their few thousand engineers be able to fend off the hungry millions eagerly studying and reverse engineering their designs and plotting bypasses to their patents? >>There is little adjustment left to make. Sun Micro, Cisco, Jdsu, and other icons of the technology revolution are losing money, just like good old cyclicals; but they still sell at hefty multiples of their pre-collapse earnings and at many times their book value. Companies that lose money when times are bad ought to sell at single digit p/es of their earnings when times are good and/or at book value. >>Those losses are already 'baked in' Hardly. It took years for reality to sink in after the Japanese bubble burst. In the US we recognize reality a bit faster, since we have fewer hang-ups about saving face, but we are still barely in the beginning stages of absorbing the reality of our burst bubble. Heck, we are still spending like drunks -- thanks to the parallel real estate bubble which is still floating, though it's losing air. Humans are like that. >>put off upgrading the car If they cut their spending by about 4% on the average, the US goes into severe recession. >>USS Enterprise is steaming ahead ... Uncle Al just controls the level of the rods in the reactor More like limping along on steam power, petrol gone, the US consumer frantically throwing the proceeds of the latest cash out refinancing into the boiler. If I were Jay, I wouldn't be too concerned. Kyros

To: Maurice Winn who wrote (8244)	9/5/2001 11:15:29 PM
From: LLCF	Respond to of 74559

<. My point was that although there are layoffs, there is so much fat in employment demands [as shown by the still low unemployment figures and the still high salaries] that we can't really say we are anywhere near a financial collapse.> Right, but just remember, unemployment is a [very] lagging indicator... if it rockets, the market will already be MUCH lower, and any 'collapse' of whatever anyone is waiting for to collapse will have already done so. <There is no financial collapse. > Or, yes there is a collapse :) The proper thing to say is that there hasn't been one... and then define it [ie. was the 30's one?]. And therefore [since there hasn't been one] the statement <<The financial system took it in stride.>> is moot. DAK

To: Maurice Winn who wrote (8244)	9/5/2001 11:47:20 PM
From: SouthFloridaGuy	Read Replies (2) \| Respond to of 74559

<<Thanks NYCB. How many of the 20% have got another job?>> One out of 6, for 33% less. Had to move out of the $3,000/mo apartment to share a 2 bedroom near Columbia Univ (1400 each). <<that shows a very languid pace of collapse.>> that's not what it shows me, and since they are my friends i would know. most of them are scared sh!tless and have DRAMATICALLY dropped their spending. i would call if more of a panic, as if somebody pinched them and let them know it wasn't ok to keep increasing their credit card debt to buy $12 martinis at clubs with $30 cover charges every weekend. most of them can't believe how stupid they were and are in the process of attempting to pay off their debts. those who have lost their jobs are pondering bankruptcy already. <<This whole drama is really all part of the Y2K bug and millennium hysteria.>> Nope, absolutely incorrect, it started with the bailout of Mexico in 1995, actually. a 233% increase in the SnP 500 from 1995-2000 closely resembles the 280% increase in the Nikkei from 85-90 and the Nasdaq - well, there are no words to explain that. why don't we talk about the DJIA or SnP going back to Earth. We give back at least 5 years, not the mere 1 1/2 that you're talking about. I started my career at Bear in 1994, so I have seen the good, bad, and ugly. I can tell you from just being in the trenches, that this party started in 1995. How do I know that? Because that's when I started making a sh!tload of money. Anybody who has read about the history of bubbles will see the striking similarities. I am a trader, I am street-smart, and I use sentiment (psychology) and history as my tools. Say all you want, but the complacency in the context of where it should be during this type of downturn is amazing. My targets remain (as they have stood documented on SI since April 2000): DJIA 4,000 ; SnP 475 ; Nasdaq 800. I've made ALOT of money in the markets the last 7 years and I have been absolutely right for the last year and a half because I have treated this market the opposite of the bull...Sell the strength as opposed to buy the dips... If you need me to recommend you good reading, I'd be happy to.