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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Lazarus_Long who wrote (14553)	3/3/1998 12:54:00 PM
From: Tommaso	Read Replies (2) \| Respond to of 94695

RE: the comparison with 1929. Thanks for the thoughtful analysis. As you say, the U. S. economy has shown no signs yet of the weakness that preceded the stock crash in 1929. I wonder if, however, the interdependence of our economy with others now means that the entire world is operating much more nearly as a unit than ever before. It is often pointed out that, for example, within the United States in the 1920s the farmers were in a depression the whole time, during the supposedly boom phase. This weakness of the farm sector is instanced as evidence of something fundamentally unsound within the United states at that time. Now we have an entire geographical sector having suffered a sudden and huge decline in wealth: most of the Asian economies. Has anyone on this thread seen any direct evidence yet in the U.S. of the contraction in Asia. Perhaps these incredible cheap gasoline prices are partly the result of that--although most of the OPEC countries are overproducing, too. But is anything else showing up yet? I guess I keep looking for prices on the best imported men's shoes to drop from --say-- $150 a pair to $75. Isn't it strange that shoes can cost more than a TV set, parenthetically. The recent turnaround in long-term interest rates is attributed by the media to selling by bond and hedge funds; it could also reflect selling of bonds by the Fed to control the money supply. If for whatever reasons the long bond goes back up to 7% this could easily trigger the start of selling in the U.S. stock market. Maybe this could expose the "hidden flaw" you mention--and maybe the hidden flaw is the vast overexpansion of credit in the US.

To: Lazarus_Long who wrote (14553)	3/3/1998 7:51:00 PM
From: Bonnie Bear	Respond to of 94695

James: a curiosity here. I can't tell what's happening in the rest of the country, but here in California it seems like most of the state is still coming OUT of the 1990 recession, not going into it. Our local economy here in Silicon Valley mirrors what's happening in the world more accurately than in the US, and our newspaper headlines still scream of worker shortage in all sectors not just tech. And I've made very nice money this month long on value microcaps, and can find a lot of value smallcap ADRs, but it was really hard for me to shake off the bear cloak to do it. The question you have to ask yourself is: the money is in stocks right now, if it moves out of S&P/DOW stocks where is it going to go? And move ahead of the herd. My guess is : convertibles/bonds, REITs, farms, microcaps, ADRs. And it will not go back into cash.