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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: High-Tech East who wrote (14677)	9/29/2002 8:38:30 PM
From: CYBERKEN	Respond to of 19219

I, too, think the equity bubble will have to right itself when interest rates begin to go back up, and the only pressure valve that can be triggered is housing prices, which must necessarily return to some reasonable norm. Two observations regarding this, though, temper me from adopting the sucker's doomsday attitude that you have fallen victim to: 1) This isn't the first equity bubble, and you and I remember the last one. In the late 70's/early 80's millions spent about twice as much as they could safely afford on "homes", because they were sure that inflation would depreciate their burdensome mortgages, their incomes would rise relative to their cash outlays, and a greater fool was around the corner and ready to give them equity profits within a month. When the Fed, under Volker, killed that market, the "investments" fell apart. But the world didn't end, purely and simply because Reagan lowered taxes, starting an economic boom that lasted until Clinton, by raising them, ultimately screwed that up. 2) Today we speak of "interest rates finally going back up" as if this would happen in a vacuum, for no other reason than to destroy the real estate "bubble". But interest rates "going back up" can only be driven by the misinterpretation of wealth creation that the glorified clerk, Greenspan, has been guilty of for over a decade. Clinton/Greenspan created a ruinous DEFLATION, which has caused the recent recession, as well as the bear market. The only way-judging by history-we will ever be able to say "This time it's different.", is if the government fails to deal with deflation in the SAME manner they always do: by printing enough money to overwhelm it. Indeed, we could use a 2-3 year run of 5% inflation right now, because private debt needs to be reduced, and the debtor class needs to be dis-empowered once again. Both political sides will-as they always do-contribute to the creation of this inflation. The liberals by expanding the coercive power of the state through spending waste, in exchange for the conservatives minimizing taxes on capital formation. The former will, as always, be funded by the latter. Therefore, this time it's NOT different, except that few Americans alive today have the life experience to recognize the deflation that has been created for them, and which threatens our economic future-ESPECIALLY the holy Social Security Fraud which everyone pretends to love so much...

To: High-Tech East who wrote (14677)	9/30/2002 5:07:14 AM
From: High-Tech East	Read Replies (2) \| Respond to of 19219

... in my opinion, this is one of Wall Street's 'dirty' little secrets ... or am I being too dramatic? ... ... sometime, during this past summer ... I remember reading (where, I do not remember, but it was probably ContraryInvestor.com) that this issue (below) could/would eventually cause a large "hit" to profits for many large U.S. corporations ... ... I suggest we ask ourselves this question, "If many large U.S. corporations 'have' to reduce their assumed future gains to their pension plans, (a) and then have to start adding millions/billions of dollars of cash to those same pension funds (when they previously have been adding millions/billions of dollars of 'assumed' gains from their pension funds to their P&Ls) ... (b) then, what happens to our stock market?" ... ... please tell me if I am missing something ... Note: this story is not from some 'po-dunk' newspaper; it is from "The Financial Times" in London ... and it was posted on the internet by them at 9:59 PM GMT last night ... It will be interesting if the story is in "The Wall Street Journal" today ... as of right now, it is not on the WSJ on-line. I repeat, "Am I missing something here?" Ken Wilson _________________________ GM fund decline raises shortfall fears By James Mackintosh, Motor Industry Editor Published: September 29 2002 21:59 \| Last Updated: September 29 2002 21:59 General Motors, the US carmaker, has made a negative 3 per cent return on its $67.3bn fund in the first nine months of this year, raising the prospect of a deepening pension shortfall at one of the world's largest corporations. news.ft.com