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

To: Tom M who wrote (23531)	8/6/1998 8:52:00 PM
From: Pierre J. LeBel	Read Replies (2) \| Respond to of 94695

Hi Tom. The FED does not control the stock market in the USA or worldwide. It may affect the timing of a decline but cannot stop it. The market is overvalued. It will come down now or later and there is nothing AG or anyone else can do to stop buyers and sellers to agree to a price that will eventually make sense in relation to the profitability of a business, its industry and its future and in competition with other investment opportunities. (That is what a free market is all about). The bubble we have been living in for several years will burst. Check the history books: it happened in Holland several hundred years ago. Pierre

To: Tom M who wrote (23531)	8/6/1998 9:20:00 PM
From: N	Respond to of 94695

"I've been thinking about this alot lately and can't rationalize why it's worth the devastation of a 30% loss of wealth to lower wages? " Good question... FT reported a consultancy montoring central banks that ours has been merrily growing money throughout... Hmmm, policy by reputation, not commitment. Nancy

To: Tom M who wrote (23531)	8/6/1998 9:22:00 PM
From: Bonnie Bear	Read Replies (1) \| Respond to of 94695

The 30% was already lost, it was tied to the Russell index. Little people don't own GE, MSFT, KO except in their pensions and 401K funds, along with their company stock that has now collapsed 30-50% in the last month. The average guy works for a small company, a russell-index company. tens of thousands of jobs were lost when the Russell collapsed. BTW our pension fund (vanguard windsor) has a loss for the last 52 weeks! So just WHO has all this wealth? A few... And who are these foreign investors that have poured 4 trillion dollars into our stock markets like pocket change? What we have here is some kind of international financial crisis tied to the S&P index- maybe runaway derivatives and futures products, or some unspeakably large debt that can only be handled by lowering the interest rate on the debt, or some unspeakably large foreign hedge fund trying to collapse the dollar by shorting the index. Or the Japanese dumping their stocks and bonds so fast that the funds can't absorb them. Or massive inflows from foreign governments printing money as fast the printing presses allow. A runaway black box. I just don't think it was mom and pop america making 35,000 a year who made this bubble. Their stock market, the Russell, has returned about about 10% a year plus dividends for the last five years. Most of them would like to see this thing collapse and get it over with. There are well over 1000 stocks selling below book value now. The fed doesn't legally have the charter to intervene in the stock market (after all it consists of multinationals), it only has charter over employment and price stability. Greenspan has repeatedly warned the public about the overpriced market. Now whatever it is, it's up to the boomers to figure out that the Russell stocks are selling at prices not seen since 1973!

To: Tom M who wrote (23531)	8/7/1998 5:22:00 AM
From: Philipp	Respond to of 94695

Hi Tom: < Does AG really want to take 30% of the wealth out of the only consuming market left in the middle of a global meltdown? I mean in 29, they saw it as a mistake for the Fed to have burst the bubble in such a way.> I think that is exactly what Greenspan is trying to prevent. So he is trying to deflate the bubble a little bit, hoping to prevent a meltdown. I am sure he would be perfectly happy with a small 20 % correction, if the market stabilized at that lower level and stayed flat for a couple of years (a soft landing for the stock market) I think that Greenspan is the most powerful person in the world at the moment, and he has been exceptionally successful in the last few years, but I still have my doubts that he will pull this one off. There are just too many wild cards (China devaluing?), and the average new investor's expectations are just as unrealistic as they were before the other big crash of the century (1929) -- so I am told. Cheers, Phil