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

To: Investor-ex! who wrote (26802)	9/8/1998 12:16:00 AM
From: N	Respond to of 94695

Agree with your interpretation, I-ex, especially with all the talk of discounted streams of uncertain payoffs, instability, iffy capital accumulation and the like.. Lest my last declamation appear cryptic, here is the triggering event, ft article 8/8/98 Nancy ---- World stock markets in new rally By Our Financial and International Staff World stock markets yesterday seized on weekend remarks from Alan Greenspan, the US Federal Reserve chairman, to launch another attempt at a rebound, after the severe correction since mid-July. Asian bourses led the rally with Tokyo gaining 5.3 per cent and Hong Kong 7.9 per cent. European markets then took up the baton. In London, the FTSE 100 index enjoyed its second biggest one-day points rise, jumping 180 to 5,347. The Fed chairman said at a conference on Friday that the world financial turmoil would have an impact on the US economy and the next move in interest rates was as likely to be down as up. Although Mr Greenspan's comments were couched in his normal cautious tones, the US money markets are now pricing in a fall in the benchmark Federal Funds rate by the end of the year. Many observers trace the start of the correction in global stock markets to comments by Mr Greenspan in July about the inflationary threat to the US economy. So his apparent change of heart was leapt on by traders anxious to mark up prices after the headlong decline of recent weeks. European markets gained 1-2 per cent, with the transnational FTSE Eurotop 300 index gaining 2.3 per cent. Wall Street was closed for the Labor Day holiday. Asia was helped by the Greenspan comments, but had its own reasons for a revival. Regional governments were active in the markets again, with some politicians implicitly rejecting the free market ethos as they struggled to stabilise their currencies and stock markets. In Tokyo, the Nikkei 225 average was given a lift by the stronger yen - as the US dollar fell on the talk of rate cuts - but also by some reported buying of blue chips by government institutions. In Hong Kong, the main driver was the government effort aimed at strengthening the financial system and the currency board. The measures boost liquidity in the money markets. Moves were also made to limit short selling, the practice of selling shares which one does not own in the hope of buying them back at a lower price. By stabilising interest rates and reducing the possibility of speculative attack, the government helped confidence return to the market. In Malaysia, share prices jumped 22 per cent as Malaysians brought money in from offshore ahead of a month's-end deadline to repatriate all ringgit or have it declared illegal tender. While some of those repatriating funds moved directly into the equity market, other local investors bought in anticipation of a rush for shares in the face of dropping interest rates, which have been cut since the introduction of controls. Overseas investors are trapped in the market by a rule that prevents them from repatriating the proceeds of share sales for a year. Analysts said they could not rule out that the rally was supported by government-linked funds and companies buying to prop up the market in an attempt to build support for the capital controls.

To: Investor-ex! who wrote (26802)	9/8/1998 12:24:00 AM
From: N	Respond to of 94695

and here's A's speech bog.frb.fed.us nh

To: Investor-ex! who wrote (26802)	9/8/1998 4:38:00 AM
From: Philipp	Read Replies (1) \| Respond to of 94695

Today everyone expects a big rally. But I (we?) don't really know how strong the selling pressure is by the big guys. There has been aggressive selling into all rallies. The big players probably know but aren't telling us. I would not be surprised if today's rally fizzles today or tomorrow at the latest (even without any news to influence it). I certainly won't go long, not even short-term, but will probably sell some of my stocks (my HK stocks were up almost 50 % yesterday because of the government intervention) and buy more puts. The irrational expectation of an interest-rate cut shows either how superficial the media are or that there is still a lot of bullish exuberance around. The only good analysis I read was in the Financial Times today pointing out that no interest-rate cut is imminent and that Greenspan wants the market to correct further but in a steady, crash-free fashion. I don't know whether he has a preferred value for the Dow, but I suspect, if he does, it starts with a 6. The thing he is afraid of, and he has said that almost explicitly in his speech, is that the stock market overshoots and falls much more, which could then have negative consequences for the economy. A correction to the 6000 level would not have any serious economic consequences, perhaps cause a short, painless, potentially even healthy recession that takes some of the exuberance out of the economy (e.g. by loosening the presently tight job market). So I will be watching out for the sellers. Regards, Phil

To: Investor-ex! who wrote (26802)	9/8/1998 6:36:00 AM
From: OVETUS	Respond to of 94695

Investor-ex> You are right. The rally of yesterday and maybe of this morning in Wall Street is just for make a false impression to the rookies about what kinf of impact has Rubin and AG, but in the deep root of the market there is one thing we all know, and that is... that the market always discount in advance the events, and generally speaking, the markets almost always surprise every body moving itself in the non-expected direction, so as of for today session, aside that we did not open yesterday, it is more than clear that EVERY BULL AND HIS CHILDREN IS EXPECTING A BIG RALLY TO THE UPSIDE, well, i would say that Mr.market is well aware of that , and maybe he wants to surprise everybody once more, and after a very small time frame of moving up, it will start going back DOWN and that is going to send very bad signals to all the Bulls waiting for the HuGE rally, and they are going to start thinking, what's happening, is going down again, so if it did not went up todays, what the hell is going on? and the desperation and frustration is going to arrive and the visceral emotion seling will recomence. Just my two cents. P.S: As for the SPGLOBEX indications, + 19 equal to +150 points in the Dow, is not a great rally, remenber we had just erase more than that more than twice in the past recent volatile down sessions, and that kind of sellof erasing the "BIG MORNINGS GAINS" is what makes the people run to sell, because it is a psicological event, and i think after the market moves down, there always be an ideologist who will show up and tell the wires and tapes of the finacial world that the market "took the AG speech as an indication of the possible hit that the US economy will get from the world wide turmoil", well at that moment i would ask, how come is possible that all the bunch of "ANALYSTs are getting paid for those kind of analysis?" Take care. Regards. Juan Jose.