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

To: orkrious who wrote (5995)	4/22/2002 9:32:54 PM
From: Frank Pembleton	Read Replies (1) \| Respond to of 33421

I reckon (from his nicely written post) that it's already priced into the value of the shares. Could that be correct? But then again markets go up more than they go down... so could we be conditioned to buy stocks (and never sell them) as soon as the morning market bell rings it's Pavlovian chime? IMHO, it's hope that's keeping the markets up - and it's hope that the world markets are relying on when looking at the U.S.markets ... ugh ... but what about that trade war? hope springs eternal... Regards Frank P.

To: orkrious who wrote (5995)	4/22/2002 10:36:25 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 33421

Yes, that W-shaped recession, is a real possibility. In Greenspan's latest speech, he said he won't be raising rates, not anytime soon. The market took that as good news. But.........the reason Greenspan said he would leave rates low, is that he thinks the recovery is very fragile. He said we are seeing a rebound from inventory liquidation changing to restocking. When that runs its course (as it must, ending by mid-late in 2002 probably), then further economic expansion can only happen from increased consumer spending. Businesses won't start spending again, and hiring again, until they see an increase in consumer spending. Since consumers never really quit consuming, and have taken all possible equity out of their houses, and have run up debt to record levels (in absolute terms, and also as a % of income), it's hard to see how we get an increase in consumer spending. So, the recovery falters. I think we'll be able to see this coming. The key is the housing sector. When/if it hits a wall (so to speak), that will trigger the retrenchment of consumer spending, and the second leg down of the recession. As long as housing prices stay up, consumers will feel wealthy, and will keep spending. (This does not apply to the average SI poster, most of whose wealth was in out-of-the-money AMZN calls through the Bubble, not in his home equity) A housing stock was my largest holding, from mid-2000 through mid/late 2001, when I sold it as it approached all-time highs. Now, I'd be shorting it, if I could find shares to short. Of course, if housing prices hold up, then we never get that second leg down, and the Bubble is back, free again to grow and grow and grow and..........