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

To: Barbara Barry who wrote (17770)	5/1/1998 10:28:00 AM
From: Tommaso	Respond to of 94695

I know we can't make very much out of one week's data, but at least it is a change. The constant inflows of recent months have been a pretty good indicator that the bubble is being kept inflated. The minute it really starts to leak cash it will come down--so, to me, any small change is a hint that to buy calls may (at these enormously inflated valuations) be exceedingly risky. I even see some slight evidence of a tiny tightening in the money supply, though it is still bloated. That is the ultimate source of all the credit creation and the money that has caused the bubble. When the market deflates, it will be coming down from a level measured in trillions of dollars. A small amount of cash removed from the market can have a huge leverage on such valuations. A five percent decline in overall valuations would be a loss of something over 100 billion dollars. The removal of 10 billion dollars from mutual funds to bank accounts could easily multiply tenfold into such a decline. I welcome more exact figures than the ones that I am mentioning. The Wall Street Journal mentioned 5 trillion ($5,000,000,000,000) as the total value of all mutual funds, including--I think--bonds and money market. I suppose that equities must be about half of that but I am not sure.