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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (17106)	11/17/1998 4:16:00 PM
From: Crimson Ghost	Respond to of 18056

Zeev: Completely agree about limited down downside near-term. I do not short, but have purchased some long treasuries. If Dow drops to 8600, the yield on the 30-year bond should fall to 5.10-5.15%.

To: Zeev Hed who wrote (17106)	11/17/1998 7:46:00 PM
From: Enigma	Respond to of 18056

Turnips of the wishful thinking kind?

To: Zeev Hed who wrote (17106)	11/17/1998 8:57:00 PM
From: Wren	Respond to of 18056

The Nov 14th issue of the Economist, which I received in the mail today, has a cover story on the US stock market bubble. They had a similar cover story in April, about three months before the July top. They point out several possible outcomes, including a soft landing, or a bubble top bust. They indicate that the most striking evidence of downturn is that total household savings turned negative in September (people spent more than they earned, net of tax). In 1993, people were saving 5%. In the second quarter of this year, investment and consumption exceeded income by more that 4% of GDP. In the past forty years, the gap has never been more than 1.4% The Economist believes that the sharp drop in savings is due to the gains in the stock market which has made people wealthier and encouraged them to spend more. They state that this level of spending cannot continue, and that a shutdown in spending will have a significant effect on corporate profits, which will cause stock prices to decline.

To: Zeev Hed who wrote (17106)	11/18/1998 7:34:00 PM
From: Crimson Ghost	Read Replies (2) \| Respond to of 18056

Zeev: Market getting more dangerous each day. Internet stocks continue to soar, the Dow went up another 50 points, but more stocks declined than advanced. New highs in the Dow a real possibility in a matter of days IMHO, but the aftermath will not be pleasant.The higher we go the harder the fall. Never in the past has the Fed started a major easing cycle with P/E ratios so elevated and the economy still relatively strong. I do believe this is a new bull market, but expect it to be the shortest ever recorded. After a stiff correction we should go to new highs early next year, but that should be the peak. Once bonds and the dollar tank and gold takes off for real, the Fed will not be able to ease any further, and then the REAL BEAR begins.