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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (25054)	8/10/2003 11:49:23 PM
From: t2	Respond to of 89467

Good points about bubbles bursting. My view is that we have not seen a bull market in rates such as the one we have witnessed. My concern is basically that interest rates are such a key component for how well other assets do. Other bubbles that have burst did not cause adverse reactions to other asset classes. High interest rates resulting from deficit spending and inability to get overseas investors to put their trade surplus funds into treasuries could be very serious...and create a chain reaction that we did not see with real estate or stocks bubble bursts. The bond bull since about 1981 to 2003 allowed for other asset classes to rebound....stocks and real estate. Maybe the DOW holds up but what about the very high PE techs..who knows. I also doubt EBAY/Amazon get back to their lows but I am betting they will drop significantly to much lower levels. The interest rate--PE factor will hurt them in a big way, imho. This is the year that I am guessing a crash in the stock market similar to 1987 is possible. Enough people now believe that the bear market in stocks is over and that would be the perfect setup for a crash. Could happen in Aug/Sep/October. My guess is October but market should decline heading into that month. I am starting to buy a lot of cheap puts, including ebay; already short a bunch of stocks. How often can one get a chance to bet on the downside in a company like ebay that is again at bubble levels. Even if one is a bull, can't hurt to have puts in a seasonally weak period for insurance. btw-as October earnings results are reported, it will become clear that there is no catalyst for techs to report a better Q4 than we saw last year. New MSFT Windows makes everyone positive (as we have seen in the past) as semis start seeing pickup in orders--not this time; so only hope is that we get some incredible economic rebound (doubt it).