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Non-Tech : Raptor's Den -- Ignore unavailable to you. Want to Upgrade?

To: Gabriel008 who wrote (5351)	11/6/2002 4:55:54 PM
From: JRI	Respond to of 10157

Hi Gabriel, nice to hear from you. I do not think it is a good sign that-at this stage of the game- the Fed has to resort to a 50 bp cut. It reeks of desperation to me... I don't think it can possibly have the same effect as in the go-go days. Business investment (borrowing)/lending does not become significantly more attractive when you lower rates at these low levels. The problems are much more strucutral in nature, and are not a DELTA of interest rates, IMO. I think all the Fed has done here is allow for a misallocation to housing which they've done Debt has to be worked off big-time..and many companies hanging on (waiting for a cyclical recovery) I fear will have to make even tougher decisions in the coming months. The fundamental argument for a bull (cyclical....only) are (1) seasonality, (2) tremendous amount of liquidity pumped in system (gvt. deficit spending, tax cuts, etc.) and (3) the fact that even in bear markets, there are retrace bounces that can be quite robust. I see (1) as a unreliable argument....in a bull, yes, it would work, but bear market data has proven the Oct.-Mar period has been negative (I believe -6.6%) (2) I do think there is a liquidity effect, but I believe we have seen much of it (3) that is the strongest argument I see. I will be shorting this market within 2-3 days, likely in size. I think we've had the bulk of our bounce, and I don't see the things I expect to see (fundamentally) at the real market bottom....too many excesses yet to work off. Cheers to you....hope all is well...must be getting cold up there this time of year-g (or are you Florida snowbird?)g