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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (213857)	1/10/2003 10:32:36 PM
From: orkrious	Read Replies (2) \| Respond to of 436258

as a short, this excerpt scares the sh*t out of me Mixing “macro” analysis with playing the markets can be both fascinating and profitable. It can also be especially dangerous, as the more parlous the macro environment the more likely that inflationary efforts will be undertaken to “reliquefy” the system and stimulate lending and speculating. We reached another of these key inflection points during the fourth quarter and it is becoming increasingly clear that this latest inflationary “reliquefication” is today beginning to take hold. It may not last; it could easily be derailed by a faltering dollar, rising yields, or a myriad of other risks; and it will inevitably prove unsuccessful. But for now, importantly, financing conditions are improving markedly, and this is a major development with respect to company and industry analysis. Such a circumstance has, potentially, the greatest ramifications for the weakest, most leveraged companies and sectors – the marginal borrowers. That many of these marginal companies’ stocks, bonds, and Credit default swaps have attracted over-sized short positions is a dynamic of the current speculative marketplace that makes things all the more volatile and uncertain. And with the market appearing happy to ignore poor earnings releases – while completely dismissing today’s dismal jobs report – we see further evidence the market wants to believe in the unfolding “reflation.”