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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (941)	10/27/1998 1:51:00 PM
From: Robert Douglas	Read Replies (1) \| Respond to of 3536

Chip, While I think that Mr. Cramer WILDLY overstates the case, I do believe that we have a liquidity squeeze going on and possibly a credit crunch in the future. Either way the prescription seems to be that there will be more Fed easing. (What a surprise, the markets already discount much of this.) As long as the numbers keep coming in soft on the economy, like today's Consumer Confidence report, (http://www.conference-board.org/search/dpress.cfm?pressid=4449) you will see a greater likelihood that the Fed's easing will be quick and decisive. Keep your eyes on spending numbers like the retail sales numbers and on the early indicators of weakness in the jobs market; weekly claims, help wanted index, etc. Although much of it is already in the market, I have been a buyer of T-bonds and Eurodollars on the recent weakness. I am still counting on more weak economic numbers in our future. How will a weak economy and an easing Fed play out in the stock market? I'm not sure, but I am shorting this rally in stocks to be safe. -Robert

To: Chip McVickar who wrote (941)	10/27/1998 5:50:00 PM
From: Henry Volquardsen	Read Replies (2) \| Respond to of 3536

Chip, Interesring article. First off that is pretty much what I was trying to say in this morning's post: Message 6178799 The bond market is much larger than the equity markets and Cramer is right, they are vital to the normal functioning of business. It is absolutely the Fed's first priority to unfreeze the bond markets. Secondly he is right that the markets have been paralytic. At its worst it was the worse I've seen in my twenty plus year career. And yes a lot of firms are laying off people. But as usual Cramer is a little over the top in his apocalyptic fears. Last week was a good week. For the first time in a long time, since long before anyone was concerned about Long Term Capital, we saw 'real' buy and hold money coming into the market. I saw some stuff trade that hadn't traded in over a year. It is not enough yet but it is a start. We probably need to see a few more rate cuts, as Cramer says, before we finally turn the corner. It is worth noting, btw, that the debt markets have been in the process of freezing up since the Asian economies started getting into trouble last year. Long Term Capital got in trouble because of the problems in the debt markets, they were not the initial cause. Thirdly, Cramer is losing his touch. He didn't get around to mentioning his former employment at Goldman Sachs until the third paragraph. And he forgot to mention Harvard entirely. He must have been really excited. Henry