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

To: LLCF who wrote (21008)	7/9/2002 10:04:39 AM
From: AC Flyer	Read Replies (2) \| Respond to of 74559

So many negative waves, man. The difference between say, LTCM and Uncle Sam is that Uncle Sam owns a printing press. The citizens of the world are happy, yes happy, to contribute to the US's capital account to the tune of $2 billion a day. They line up to voluntarily hand over their Monopoly money in order to buy US dollars. Why do they do this? Because they like US financial assets. They like Uncle Sam's T-Bills. They like US corporate debt. They like US equities. Why do they like these things? Two reasons: (1) They know that when they buy Uncle Sam's T-Bills there is a 99.9999999999999999% probability that Uncle Sam will repay them, with interest. (2) Just like Americans, they like to play at the Big Board/Nasdaq casino. Unlike other casinos, this casino has a 107% payout - 125% on good days. We are now 2.33 years into the biggest financial bubble implosion in history. The telecomm/high-tech sector of the economy is in a depression, yea verily a depression, with just the faintest glimmer of light visible at the end of the tunnel. The manufacturing sector is hesitantly emerging from what some say is the worst recession in 50 years. We have found that some of the country's largest companies were being used as personal piggy banks by white collar big-money criminal psychopaths. Oh. My. God. The dollar must be getting pounded. Uncle Al must be having to offer big money incentives to keep those capital inflows rolling. Let's take a look, shall we? And yes, the dollar has been pounded, yes pounded, all the way from .83/Euro to .99/Euro (except it was 1.17/Euro a couple of years ago). And poor ol' Uncle Al. To keep the foreign capital flowing, he's having to offer stratospheric real interest rates all the way into the hundreds (of basis points). Sky high - up around, oh, 1% or so. Yes indeed, we are as a nation in big, big trouble.