Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Taikun who wrote (58630)	1/10/2005 2:46:00 AM
From: energyplay	Respond to of 74559

Hi Taikun - I don't think the future economy is constrained to an 'equal and opposite' reaction to every boom and bust (I know that is not what you said , but let put up this position). I think there is an equal and opposite tendency, but it can be overcome by events and decisions - in both directions. Notice that the Fannie Mae problem is passing without much of the sky falling. Considerable efforts to cut defense spending (aircraft carrier, F-22, etc.) and other parts of the Federal budget. A little inflation and employment growth will increase Federal tax revenues. We should get both this year. Most State governments had to cut spending sooner, and they are already in better shape. California is lagging getting it's fiscal house in order. Of course we, expect our governor will be up to the task of persuading the legislature - at least that's not as bad a job as cleaning the Aegean stables.... Corporate America has good balance sheets. Even junk bond defaults dropped to a very low level last month. The number of consumer credit card delinquencies fell again. The ones who were delingquent owed more, however. Mortgage payment delinquencies are down too. The lower USD is starting to affect the trade balance - last quarters current account deficit had a very tiny increase, and should start going down, especially with oil prices dropping. Short of another big terrorist attack, I don't see the crisis yet. A year from now, maybe CDOs or derivatives or China banks will blow up....but not for now. I think that's why gold is so boring. I will say I expect a big, sharp drop in the stock market, sort of a mini-1987, between now and the middle of this year. S&P has a p/e of 20, might drop to 17...that's 15% We're off about 4-5% in January.