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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Bonnie Bear who wrote (11502)	12/14/1997 9:02:00 PM
From: j g cordes	Read Replies (1) \| Respond to of 18056

Bonnie, agree with you on some of your points, though I'd phrase it differently as money dosen't exactly follow where people want to live.. otherwise all the money would be in Hawaii or similar nice place. Money finds, creates and exploits economic opportunity, people follow job opportunities, and the desirability/scarcity and economic grouping of habitable land relative to income determines realty values. Stocks do best when profits rise, most stocks do benefit from lower interest rates (though not all)... One of the most interesting and sophisticated cities I've visited is Buenos Aires.. a wonderful mix of S. America and Europe... I don't follow a lot of SA stocks except TMX and TBR. Chile apparently has established a low inflation, low gov debt, high growth path. Its odd with the banks, isn't it? Most were completly caught off guard by the run on bonds. Since they're always looking to hit us with higher borrowing rates, while hoping for lower Federal Reserve bank lending rates, its not a surprize. I've recently had a whopper of an argument with my bank over their overcharging on an insufficient funds event caused because they didn't clear a cashier's check in two days. When I went on the Federal Reserve system and looked up what really happens I was astounded. The banks never clear one bank to another, they clear overnight through the Fed which issues them credit then collects from the check's bank. Cashiers checks are legally one day only as are government checks, cash and some other instruments. The real cost of a bank to clear a temporary insufficient funds check is the overnight lending rate times the amount of the check... about .16 cents per thousand per day. They socked me with a 25.00 charge! Anyway, they ate the charge and acted indignant that I'd invested the time to check on their "policy." Regarding higher rates in 1998, I am currently assuming that consumer demand of products and services produced in our country will start to go down in early 1998. The currently higher levels of employment will start to fade with increased layoffs as Asian factories literally work their way out of their debt with cheaper products. Our imports will trend sharply up in volume not dollars spent.. either way the US consumer can only absorb so much at any price without significant new product cycle advantages making old what was just purchased... No major up tick in inflation... but more labor strife will be in the news as job market shrinks a little. Jim