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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: Justa Werkenstiff who wrote (14514)	11/11/2002 12:56:00 AM
From: Lone Ranger	Read Replies (2) \| Respond to of 30712

Justa, I remember reading that article way back when and just read it again. "Foreign investors would continue to reduce their exposure to dollar-denominated assets, and US investors would undoubtedly rebalance their portfolios in an effort to seek greater exposure to non-dollar-denominated assets. The result would be lower prices for equities and bonds alike." This quote is the basis of my question. Bond prices are still rising as their yields decrease. No basis yet of foreign investors fleeing the security of U.S. treasuries. For equities, that may be another matter. But imo, until we see bond prices fall, and therefore interest yields increase, investors will still be placing their bets in the U. S. Must be that foreign investors feel less sure about their own economies with their socialistic tendencies ie high taxes, high interest rates and comparatively slower growth . A worst possible situation would be a necessity to defend the dollar by raising interest rates without a real recovery in our own economy. Just like we need to watch the housing market for signs of deflation, the dollar decline should be watched and if they happen together then we are in much worse shape than I currently think. Hopefully a soft dollar landing will occur. In any case, after this counter trend rally fizzles I think we will retest somewhere near our July-Oct lows. Hope a final washout then occurs so we can form some kind of a significant bottom. It will all bear watching.