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.

Gold/Mining/Energy : At a bottom now for gold? -- Ignore unavailable to you. Want to Upgrade?

To: Brian Gerbozy who wrote (908)	11/15/1997 4:14:00 PM
From: Jim Ilchyshn	Read Replies (1) \| Respond to of 1911

Brian, Good thing you clarified that...I was worried that you were going to jump! Since no one has posted anything from Nick Guarino (The Wall street Underground) I will take a few excerts from his latest newsletter, - hopefully I won't get in trouble, but I just can't resist as some of his writings are great! "Wall Street told us markets were more sophisticated now. Crashes and bear markets were supposed to be a thing of the past. The told us market globalization, computerization, increased sophistication and circuit breakers made another 1987 - style crash impossible. To show you how cocky Wall Street has become, on October 20th - the tenth anniversary of the '87 crash - the chairman of the NYSE - and the chairman of the CME - together went on national T.V. and proclaimed another 1987 crash could never happen again. Well, "never" lasted all of one week. On October 27th. the stock market suffered its biggest one-day loss ever. Brokers wouldn't let clients sell their stocks, Day trading has become more and more popular with the masses: this wiped out thousands of people who recently got into the market. Thousands who trusted Wall Street have learned a bitter lesson. When things go bad, their brokers are not there to serve their needs. Brokers didn't answer their phones. Many mutual funds wouldn't value their portfolios for three days. Of those that did, many did not use actual stock market values. They plugged in numbers based on where they said stocks should be. This let them hide the real damage that had been done. All this from a lousy 7% drop. Imagine a 30% plunge. That and much more is coming. The tricks we saw will be bigger than ever. People unable to get out of their mutual funds, at any price. Mutual funds not valuing their portfolios. Brokers not answering their phones. Trades not executed. The biggest loss and transfer of wealth ever will take place. Believe me, the little guy, who believed in Wall Street, will NOT be on the winning side. The five most costly words in the English language... ... are invest for the long haul. This is Wall Street's chant. They tell you to buy on dips. The market will always come back. Wall Street has peddled this fantasy right before and during every bear market. But bear markets wipe out 50% - 90% of the market's value. They last 10 to 30 years. No investor has 10 years, or more to get back to break even. After the 1929 crash, the market took over 60 years to break even in real terms. Asia is in more serious trouble than ever before Asian banks, businesses and financial institutions are in deep trouble. They have a glut of manufacturing capacity, but nothing to fill that glut with. Even Detroit has built evormous factories in Asia. But the markets for those autos doesn't exist. Asian car sales are collapsing. Asian currency and stock markets still have a long way to fall. The IMF the World Bank and Cnetral banks around the world have desperately tried to prop up Asian currencies and markets. Even the Fed is pouring in vast amounts of money. None of that puts a dent in the fundamental problems. In fact, it makes them Worse. Now don't get the impression this Asian crisis is brand new. Asia has been in desperate trouble for six months. They have been quietly working with the Federal Reserve trying not to spook the markets and here is why it hasn't worked. Asia has been the lender of last resort, to fuel the U.S. economy. The U.S. has been running record balance of trade deficits for years. The Asians are on their own treadmill to hell. They have racked up huge trade surpluses. Normally this would lead to one simple event: a plunge in the U.S. currency and economy. That would force trade, currency and business flows to realign themselves. But that didn't happen. Instead., Asians loaned their dollar surpluses back to the U.S. Treasury. In return, the got U.S. government securities. That let the game go on. Asian loans gave the U.S. the capital it needed to prop up its stock and bond markets. At the same time, the Asian subsidy kept U.S. inflation at record low rates. Asia kept its currencies artificially low: this made their products cheap in the U.S. and gave the U.S. the money it needed to keep buying Asian goods. Six months ago, this cozy little arrangement started to unravel." - Have to get ready for supper but will continue later if there is interest. - Jim.