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

To: Follies who wrote (19963)	6/7/1998 11:11:00 PM
From: RWS	Read Replies (1) \| Respond to of 94695

I'm looking for a long choppy period of consolidation which results from the uncertainties inherent in an economic and financial system teetering between inflation and deflation. Global deflation is being treated with monumental infusions of hurricane level waves of cash which are inflating financial assets. The CIBCR leading index of US employment is spiking down, a move that implies recession ahead. This recession may occur without a Fed tightening and it will resolve the inflationary threat from a tight labor market. The unemployment rate will not go back up without the "stimulus" of a recession. The market will try to discount this upcoming event while awash in liquidity. The Fed may try to soften the downturn with an easing. I see these as countervailing forces in the market. The analogy of the market to the Titanic is not appropriate in my opinion. Although the forces of nature are not under our control, there is quite a difference between our ability to foresee, predict and react to events now than in the days of the Titanic. There may be a crash, but Greenspan, Clinton, Summers, Rubin and all the other government and private individuals working to maintain US and Wall Street's global dominance will use every resource available to control it. They don't forget the social upheaval and revolutions engendered by the crash of '29 which threatened the existence of our dear system of capitalism. The next bear market may be the longest and shallowest on record. RWS