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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: kahunabear who wrote (338)	10/5/1998 2:11:00 PM
From: ahhaha	Read Replies (1) \| Respond to of 2794

Usually the stock market can do ok when inflation rises slowly. Unfortunately the institutions are now trained to think differently and monetary inflation has to be dealt with by rising interest rates. This will impact the large companies most so you will have an extended bear phase until the rates peak. It is impossible to predict market excesses or even estimate them. At Dow 5800 there is a reasonable bottom based on a pretty negative outlook. If that were to occur by the time that level was reached there could be another set of irrational moves made by authorities. That's all they can do. Make wrong moves, because they haven't a clue either about how dumb they can get. In April I thought the fed funds would rise to 7%. Now the FED in an attempt to save us, could generate so much money that the ensuing short term interest rates could rise to 9%. In a way the freaked out banks are already acting in their curtail of credit supply as though the market pricing were an effective 7%. The universities have the entire world fooled into believing there is a one-one inverse connection between supply and price of money. Now some are learning about elasticity especially in Japan. It is hopeless to have any confidence in the numbers above. The stock market could start up any time and for the next 3 months everything looks acceptable, then we hit the skids again. The acceptability is the fooler. Correct action must be in place for a gradual recovery. Usually "acceptability" only enables leaders to avoid or sweep under the rug the problems that caused the trouble in the first place. You have to know what is wrong and how to properly correct it. Maybe no one knows that. Then, the trouble rehatches with all the players thinking, "I gotta get out".