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To: long-gone who wrote (18637)	9/13/1998 9:59:00 AM
From: goldsnow	Read Replies (2) \| Respond to of 116861

Grasping for straws? Funny did you recall anything like it about miners? If Asia recovers aren't they should salivate about commodities? Pervasive Market Gloom May Be A Buy Signal 07:29 a.m. Sep 13, 1998 Eastern By Pierre Belec NEW YORK (Reuters) - Wall Street has gone through some tough times but some experts say the best time to buy stocks is when things seem to be as bad as they can get. Sure, the global economic malaise that ravaged the market over the last seven weeks is ongoing. But what's encouraging is that the contagion may not get worse and spread to other countries. Some investors, who use early warning signals or contrarian indications, are getting ready for the next big move up. They see a break in the clouds, expecting a recovery next year in the battered Asian countries, which might fuel the next great bull market. In the United States, the economy is still in great shape with inflation practically nonexistent. The prospect of a drop in interest rates before the end of the year makes stocks more appealing, the experts say. ''The news needs to stay bad to set the stage for what we expect to drive the next super-cycle bull market,'' said Don Hays, chief investment strategist strategist for Wheat First Union. He said, for instance, one of the most reliable bull market signals occurs when all the economic numbers show a recession has started, not when the data show the recession is over. Right now, most investors are singing the Dow Jones blues, and bullishness is not rampant on Wall Street. Investors are worried about lagging corporate earnings and the possibility that President Clinton may face impeachment proceedings over the White House sex scandal. Analysts said investors should look for clues that suggest the market might be set for a rebound. Another reliable bull market alert is the stock trading activity of corporate insiders. They are the people that have access to inside information -- senior officials such as directors and chief executive officers -- who draw much of their compensations from stock options. The officials tend to have a good idea about their companies' future earnings prospects and professional traders shadow the corporate leaders on the belief that where there's smoke, there's fire. Frank Ponticello, senior analyst for Prudential Securities, said there has been a jump in insider's buying of stocks recently. The insider buying over the past month soared to an unusually high 61 percent. Normally, the consensus insider buying ranges between 30 percent and 45 percent. The insiders have been known to scoop up stocks at the right time, having bought at a feverish pace after the 1987 market crash, the 1990 panic sell-off and in late 1994 and early 1995 when the market embarked on its strongest bull run ever. ''The current buying shows bullish confidence by the insiders,'' said Ponticello. ''The buying has mostly been in secondary stocks, which are in a bear market, and it would appear to be bottom fishing.'' Ponticello said that while the insiders' buying may be a signal that the market may have bottomed out, he cautioned that some insiders have been wrong in the past. ''It may not necessarily mean that they are right in the timing or their pricing point,'' he said. ''We've seen insiders buy natural gas and oil drillers six or seven months ago, and the stocks are still down 30 percent.'' Another contrarian indication says articles in major national publications may signal the time of a market turnaround. According to the theory, when non-financial publications issue bearish articles it may be time to buy stocks, while bullish coverage could be a bearish signal. The reason is that the publications tend to pick up on Wall Street situations only after they have been around. Often, by the time the editors catch on to a market event, Wall Streeters tend to view it as confirming the maturity of the extreme market move rather than announcing that it is ongoing or beginning. Coincidentally, the Sept. 14 issue of Time magazine has a cover story, entitled ''The Bears of Summer.'' It asks the question: ''Is the boom over?'' For the week, the Dow Jones industrial average rose 155.25. The Nasdaq composite index gained 75.12 to 1,641.64 and the Standard & Poor's 500 index rose 35.17 to 1,009.06. Copyright 1998 Reuters Limited.

To: long-gone who wrote (18637)	9/13/1998 10:05:00 AM
From: goldsnow	Respond to of 116861

ANALYSIS-A new kind of crisis for the markets 08:17 a.m. Sep 11, 1998 Eastern By Henry Engler LONDON, Sept 11 (Reuters) - This is definitely not 1987 -- it's a lot worse. The carnage piling up on the world's financial markets bears little resemblance to the stock market crash of more than 10 years ago. This time the market swings are a lot more severe. Analysts say that volatility is a reflection of two things -- more uncertainty than ever before, and more danger. ''I don't think we've seen anything on this sort of scale universally in financial markets, not just in stocks but in other products as well,'' said George Magnus of Warburg Dillon Read. ''What we are really seeing are some of the manifestations of what we can pretty well call systemic risk.'' Equity markets in the U.S. and Europe, sheltered earlier this year from the turmoil in Asia, have taken a huge drubbing, with the Dow Industrials down about 18 percent from its peak. The fallout across the world's emerging markets has been even more severe. Over the past month the Russian market has dropped by around 70 percent, while Venezuela and Hungary have seen losses of 39 and 38 percent, respectively. The turmoil has many roots, not least the simple fact that much of the developing and industrialised world is either in or near recession. In some cases, such as Japan, there is outright price deflation in certain goods and services. But international investors are being whipsawed. One day it's ''sell, sell, sell'' as economic gloom deepens and earnings forecasts are slashed. The next day it's ''buy'' as analysts start talking about coordinated interest rate cuts by the Group of Seven industrialised powers. Take the Dow Jones industrial average, the most watched equity indicator in the world. Last week it was falling through the floor as people were talking about a 1930s style global depression. At the start of this week it surged more than 300 points, its biggest one-day gain, as investors reckoned Federal Reserve chairman Alan Greenspan was prepared to relax monetary policy. By the end of the week the Dow was back in the dumps as global market anxiety returned with a vengeance and concern about the future of scandal-plagued U.S. President Bill Clinton mounted. ''We have two very different and competing forces at the moment,'' said Peter Sullivan, analyst at Goldman Sachs in London. ''One is a general trend to downgrade profit numbers and economic growth forecasts and the second is lower interest rates and bond yields.'' But the crisis is more than that. Perhaps the most perverse feature, say analysts, is how all economies, good and bad, are now being tarred with the same brush. This shows up in the way markets in Asia, Europe, North and South America have all played follow the leader. Analysts say that suggests investors have abandoned any sense of discrimination or analysis of economic fundamentals. ''The events in Russia show you how seemingly insignificant economic events -- where you have an economic area which has a GDP almost the size of the Netherlands -- can have enormous consequences because of the way it washes through the market,'' said David Bowers, European strategist at Merrill Lynch. This contagion effect is symptomatic of the changed nature of the global financial market. Not only have capital flows into emerging economies grown enormously over the past decade, creating closer linkages with markets in the developed world, but so has the use of derivatives. ''There is no question in my mind that the explosion in derivatives has contributed the increased volatility on most markets,'' said the head of equities research at one London bank. Data show the use of derivatives is still climbing. The latest figures from the International Swaps and Derivatives Association show volume in over-the-counter (OTC) derivatives rose 25 percent to $22.18 trillion in 1997. While derivatives are used to limit risk they are also used by investors to make ever larger leveraged bets on shares, bonds and currencies. In times of crisis, the unwinding of such trades can fuel sharp price movements in the underlying cash markets. ''There are periods in markets where the futures and derivatives drive the cash markets. I think what we have to come to terms with is that the derivatives markets can contribute quite a bit to the volatility in the cash markets,'' said Bowers. Amid all this, analysts see little on the horizon to suggest things will change soon. Trouble spots loom from Beijing to Bogota. No wonder people are fleeing to low-risk U.S. Treasury bonds. ((London newsroom, +44 171 542 7770, Fax +44 171 542 4939)) Copyright 1998 Reuters Limited.