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To: MonsieurGonzo who wrote (51290)	9/1/1998 1:35:00 AM
From: Dwight E. Karlsen	Respond to of 58727

MG, interesting you bring up Clinton. As I recall the selling began to accelerate within days of the "apology that wasn't an apology". IMO the markets are demanding that Clinton resign immediately. When 19% of Americans no longer view their leader as trustworthy, then the leader has lost credibility: Perhaps Clinton should now go on TV, wag his finger at us, tell us he "wants to be firm about it", and tell us that it will all get better. Then he can have his wife come on TV and explain to everyone that the world's economic turmoil is the result of a VRWC. Have you noticed that nobody is even looking to Clinton to initiate any kind of leadership? He's simply taking up Presidential space. re there just will not be sufficient kapital. I'm not sure if you're talking world-wide or whatever, but, I don't see how Russia disappearing off the map would have anything to do with anything. As for liquidity in the US, it's out there, at least in modest quantities: $1.3 trillion in money market mutual funds as of Aug. 6th. re This isn't a "dip", it's a debacle. What did you think the July rally was? I saw it as a terrible mistake; a debacle, and my sense of that was strong and steady throughout the entire month. The market had no business running up: Japan, Korea, HK, Indonesia, Malaysia: their economies were already deep in the dumper. Japan was not doing a darn thing to fix its bank problems, and really still have not, that I know of. Nobody in their right mind even expected that they would bounce back from serious deep do-do problems in one frigging quarter: Indonesia is in the grips of a depression at least as bad as our 1930's, if not worse in all respects. The real roots of the current debacle are nothing new to US investors: Poor fiscal controls in SE Asia and Russia. The "Asian Tigers" have gone bad, and the trainer is cowering in the corner of the cage, trying desperately to find the path to the door. Remember what was to be the world's new tallest building? Jakarta towers. Not any more. Somebody forgot to tell the SE Asian countries about fiscal controls, such as the importance of staying within prudently defined financial ratios such as debt-to-equity.

To: MonsieurGonzo who wrote (51290)	9/1/1998 1:59:00 AM
From: Dwight E. Karlsen	Read Replies (1) \| Respond to of 58727

speaking of denial though: Bulls in July have been awarded the ultimate denial award. The party for internuts is finally over. No, I'm afraid that Amazon won't be buying out WMT like we saw an official Brokerage analyst hint at back in July. I don't think that equities have lost their credibility though. That's sort of like saying that if the market won't value YHOO and the rest of the internuts at the same market cap as their bricks and mortar brethren, then equity buyers will just take their marbles and go home. I don't think so. What has happened is that the market has finally checked in for a serious session on the couch at the shrink's office. That's an important first step, and one that I applaud. As one of the few rational market observers noted a couple of months ago, "when all is said and done, people are going to go back to actually doing due-diligence when attempting to value equities". If and when it appears that we are at such a point, that is when I would go first to the RUT. I admit I don't fully follow your rationale on commodity surplus: that's not a new development either. While I'm not making any case for or against a US recession, I am saying that I don't think that equities are dead. Perhaps they've been dealt a concussion, but it's not fatal. IMO.