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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (4620)	11/10/2001 11:39:53 AM
From: Susan G	Respond to of 99280

Message 16638190

To: Zeev Hed who wrote (4620)	11/10/2001 12:26:12 PM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 99280

Zeve, It is beyond my comprehension how the excesses and malinvestment that occurred during the 90's are going to get swept under the rug. We have capacity world wide that needs to be redeployed "into what"!!! We have debt world wide that needs to be written off, which means bankruptcies. In our system debt or losses can not be written off without someones' getting hurt. I personally can not see how any amount of money that the fed can generate or Washington can send to the people will make a difference until there is some rational semblance of debt to assets with the citizens and corporations world wide. BWDIK, Maybe I don't understand the problem. Joan

To: Zeev Hed who wrote (4620)	11/10/2001 12:27:34 PM
From: que seria	Read Replies (1) \| Respond to of 99280

Zeev: Here's another view as or more pessimistic as yours for the long term, but without any of your useful market timing outlook: safehaven.ca An excerpt of his grim reaper perspective: "The dilemma, as we have addressed for some time now, is not that policy is ineffective in stimulating normal borrowing and spending patterns. The insurmountable problem is that a Bubble economy of such historical proportions requires enormous sustained credit excess – feeding to all the beckoning valleys, cracks and crevasses - to maintain the semblance of a normally functioning system. Clearly, excesses of such magnitude are problematic and increasingly destabilizing for both the economy and financial system. This then explains why the frantic "terminal stage" of Credit Bubble excess is generally (and fortunately) short lived. Nonetheless, the authorities have embarked on a futile and increasingly precarious course of attempting to resuscitate unsustainable boom-time demand. Do they truly believe it is advisable to stimulate a wild burst of vehicle sales, unprecedented mortgage credit creation, and such extreme money supply growth? While these actions are indeed forestalling a severe downturn, they are significantly increasing the probabilities for much worse down the road. The U.S. economy’s greatest ills are structural, the unavoidable consequences of previous gross borrowing, speculating, and spending excesses. It is our view that these types of deficiencies and imbalances are only growing more dangerous. The patient has been poisoned by credit and speculative excess, has suffered severe damage to internal organs, and is in critical need of extended bed rest and carefully guarded recuperation. The Fed is injecting steroids and prescribing an aggressive exercise program. This will be a regrettable case of the Federal Reserve being forced to learn the hard way that there is no shortcut for a necessary healing process/adjustment period. It does not today take a wild imagination to come up with a scenario where collapsing demand in the overheated auto and residential real estate markets lead the economy into a very deep and protracted downturn. Indeed, objective analysis would today have to consider such a circumstance as a reasonably high probability scenario." Like you, I used to never short. Being a valuation-oriented investor, tired of losing money via LTB&H, and without the time or inclination for much trading, I've this year resorted to shorting. Your market timing prowess works as well when heeded for the downside. Don't eat those turnips!

To: Zeev Hed who wrote (4620)	11/10/2001 10:59:57 PM
From: Fiscally Conservative	Read Replies (1) \| Respond to of 99280

Zeev With regard to your reply to,s.berg,you wrote: "If the economy rebounds (and thus deficits once more contract or stabilize) sharply by the second or third quarter, they may be able to move and soak back some excess liquidity by late next summer (giving us a memorable October Massacre in 2002? Just before congressional election? They did it before....), if the bounce is slower, the next bull will probably "live" through at least the end of January 2003. What could change this outlook? If despite the stimulus, the economy does not rebound at all and we find ourselves still marred in a recession by next summer." What would be the likely outcome if the economy does not rebound at all and we do find ourselves marred in a recession by next summer? Explicitly,would the FED still be in the position of having to raise rates to take back the excess liquidity? How long can the FED allow the vulnerability of excess liquidity too remain in a non-responding economic cycle? Is there a time table here from which Greenspan follows or is history our only guidance?