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.

Pastimes : Nostradamus: Predictions -- Ignore unavailable to you. Want to Upgrade?

To: Jane Hafker who wrote (178)	3/21/1998 8:37:00 PM
From: bobby beara	Read Replies (2) \| Respond to of 1615

Jane, don't be fooled by the prosperity, at the pinnacle of the stock market in 1929, there was big prosperity - it was the roaring 20's, BUT the prosperity was leveraged two decades out on easily obtained credit and margin in a stock market that was priced two decades out. We have the same thing today on easy to obtain credit cards (who doesn't have at least a half-dozen or more) and the middle class is completely invested in a stock market that sells at triple the book value of the 87 peak and P/E's that make the nifty fifty market of the 60's look mild. People are paying the price for Coke's earnings into the year 2015. No we don't have 90% margin like the 20's, we have something much worse - a multi layered and flourishing derivatives market. Just the thing that brought Orange County to it's knees, brought Korea to it's knees and Indochina to it's knees. Not only is the individual margined in debt so is our country. In 29 we were the greatest lender nation, 90's now the worlds greatest debtor nation and they all have Bill on the payroll. The hype sold on Wall Street is the same hype that lead to 29' 73 and 87'. Pick up John Kenneth Galbraith's writings on stock market bubbles. It exactly describes what's going on NOW! I can even give you a historical Mark Twain rhyme. In the winter on 29' the then Fed Chairman stated that the market was rising too fast and there was "irrational speculation" , the market crashed within 6 months. In the winter of 96-7 his historical counterpart, Alan Greenspan uttered almost the same words "irrational exhuberance" and here we are 14 months away from that warning and double the distance of the 29' warning. At stock market peaks everyone is fooled, otherwise how could we reach a pinnacle before a crash. Pray Hard, bobby