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To: JBL who wrote (19864)	10/4/1998 1:27:00 PM
From: Mike M	Respond to of 164684

<<<<Mike : A bottom will be reached when the pain of the medecine to cure the banking system is being felt.>> You may well be right JBL...Intellectually, it is difficult to determine where the profits from multinationals will come from....There will be restructuring and many of the easy cost-cutting decisions have already been made...As the Fed continues to ratchet down interest rates, and there will certainly be more of that (perhaps as much as a hundred more basis points before this is over), we should even experience some dollar weakness which will allow some enhanced competitiveness in US products..... I see these large companies under performing for the next couple years. Don't forget that the small and intermediate caps have been in a bear market for a year now and many have seen their market cap reduced by 50 to 80%....Companies, in many cases with PEs of 3 and 4....Sure E is at issue but many companies are far more dependent on local demand and have survived global downturns in the past. <<...banks will become more conservative, and that for sometimes (1 year, 2 years, or maybe more), the growth of all economies will be affected.>> It is about time they got that old time religion, again! No one said this was going to be easy but I believe that it is our demographics and structural strengths which will allow us to skirt recession, "if" our Fed and politicians are agile enough to recognize what is happening and react accordingly. The Fed must continue to accommodate money growth (even encouraging a slightly higher growth model than Greenspan is comfortable with) and the government must promulgate private spending, rather than federal (I think), of our revenue surplus.... <<This is a fundamental shift that will take time to be dealt with, and this is why calling the recent downward move a correction is not realistic.>> Again, it depends on which company you are talking about whether we have experienced a correction or are in the early stages or late stages of a bear market.....To date the thrust since July has resembled a correction more than a drawn out bear market....It is just semantics, however...... I continue to believe that it is a stock pickers market and we remain in a minefield until many of the problems you and I address are dealt with. Regards