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

To: Oeconomicus who wrote (18924)	5/21/1998 2:52:00 PM
From: Haim R. Branisteanu	Read Replies (1) \| Respond to of 94695

Buschman this will make it even more difficult to take advantage of a market drop. e.g. shorting stocks, as very limited information actually exist on "NET" short positions. The one a month report of short position is as outdated as last month quotes <ggg> completly useless BWDIK Haim

To: Oeconomicus who wrote (18924)	5/21/1998 3:41:00 PM
From: Robert Graham	Respond to of 94695

I am always open to unsolicited comments from anyone here. I find your comments on the economy interesting, and I do agree with you where you stated that the economy will experience a period of slowing earnings growth which will have its impact as a downward revision of earnings estimates. I think the evidence of a slowing economy has been in place for a period of time now. Also we can see recent fund activity in the stock market that appears to be aligning itself with such a prognosis. Bob Graham

To: Oeconomicus who wrote (18924)	5/21/1998 5:27:00 PM
From: edward miller	Read Replies (1) \| Respond to of 94695

Think about your comments about what analysts are saying - >> Analysts have been shifting all their projected growth out into >> the second half of the year, leaving full year estimates for a >> lot of companies pretty much unchanged. Do you really think that earnings will suddenly explode from nothing to double per quarter in the 2nd half, making everything OK for the year? I think this is a farce, and what analysts are really doing is coming up with an excuse to continue to sell the public on stocks. The pros can read between the lines, and I bet they are selling every rally at this stage because they know that with earnings so weak in the first half, things will be slightly up in the 2nd half at best. I'm thinking independent pros here, not mutual fund managers. Young fund managers may actually believe some of the press releases, but not the twice-burned guys who are investing their own $$$$$. >> I don't think it will be Fed rate hikes that will bring this >> market down, but rather weak earnings. Agreed. Once the majority of investors are in on what the 2nd half is really going to be like, the party is over. However, I can see one scenario in which the Fed rate hikes could be the trigger. In my opinion any rate hike could be the last straw in Asia. This is because a rate hike will strengthen the dollar, making US assets even more valuable, short term. This puts more pressure on Asian economies because this makes a capital flight problem worse. Once a bad situation gets out of hand crazy things can happen that you don't think could happen or should happen. We could see strong anti-American sentiment develop and spread like wildfire in those countries. Imagine several economies in the shape of Indonesia which a lot of angry people who suddenly decide that US banks are to blame for everything. If you are not a US citizen and are deeply hurting financially, then I think it's an easy step to blame the US as a whole. The political situation is potentially so explosive that I don't even want to think about it. Indonesia could be on the brink of this scenario right now. In this situation Asia would bring down earnings, so it still means that weak earnings are the culprit in a sense, but the real trigger could actually be interest rates doing the zig when they need to zag to keep the global economy alive. Also, reduced earnings might then be the least of our problems. Keep in mind this is the worst that I could imagine, even in my most pessimistic mood. However, we are at the most extreme evaluations is history, so I say downside risk is very high even ignoring all the worst-case scenarios. All of the above paragraph is pure speculation on my part, so take it with all the caveats - IMHO, etc. Ed Miller