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To: IceShark who wrote (12544)	12/7/1998 1:51:00 PM
From: MythMan	Respond to of 86076

this clown needs to get with the program: MARTS COULD MISS HOLIDAY SPIRIT THIS YEAR By JOHN CRUDELE ------------------------------------------------------------------------ THIS'LL likely be one of those up-and-down months for the stock market. December is usually kind to stocks. Professional money managers and people who trade stocks for a living hate to lose any of the gains they've made so close to the end of the year. So the final month of the year has had a definite upward bias. It's the best month ever in terms of gains in the Standard & Poor's index, according to the Stock Traders Almanac, and the third-most generous month for the Dow since 1950. That's the good news. The bad news is that this December is facing some unusual obstacles. First, of course, there's the impeachment inquiry concerning President Clinton. Since Wall Street is expecting it will go nowhere, any event that's negative for Clinton will hurt the market. But the market's biggest problem is its most recent successes. After being down nearly 20 percent earlier this fall, it recovered all of that ground before giving back a little this week. But it took multiple rate cuts from the Federal Reserve and a coordinated cut in borrowing costs by 11 European nations to get stock prices back to where they had been. And even as the Europeans last Thursday were announcing their actions, the Dow Jones index was declining on Wall Street by 185 points. That's the long way of saying that despite Friday's 136-point jump in the Dow, stocks just aren't cheering this extraordinarily good turn of events as much as they should. And, worse, what will the 11 European governments and America do for an encore if the markets sink again? It's clear that going into the gentle month of December, investors are still shaken by the recent skittishness in the markets. And it is also clear that the amount of liquidity is shrinking. When was the last time investors could push both stocks and bonds higher at the same time? Right now, here's how it works: For the stock market to rise, investors have to reallocate assets from bonds. And vice versa. The amount of liquidity around just can't pump both markets. * What more can I say about Washington's weak grasp of the labor market situation? In the middle of the largest downsizing of this decade (yes, even worse than during Bush's years) the Labor Department on Friday said that an extraordinary 267,000 jobs were created in November. And the unemployment rate declined to 4.4 percent from 4.6 percent, the government claims. Since this was one of the two months a year that the government changes its seasonal adjustments, nobody will ever be able to see behind this numbers trick. But as I said on Friday, Washington's calculations are absurd and dangerous. Here's one unusual occurrence experts spotted in the November numbers. Retailing jobs rose 65,000, presumably because of holiday hirings. The only trouble is that Washington is supposed to seasonally adjust for such occurrences. So that would mean that retailers not only hired their normal holiday help, but 65,000 more people on top of that. Didn't happen. * On Friday there was a lame rumor that the acquisition of Bankers Trust by Germany's Deutsche Bank had been called off. Officials in Germany and at Bankers Trust denied the rumor and - unless someone unearths the true problems at Bankers Trust before the deal is completed - the transaction will probably stay in place. As it turned out, Bankers Trust stock declined because the merger agreement - which was made public too late Thursday night to make Friday's papers - was inconveniently worded so that Deutsche Bank can take a hike if Bankers situation worsens materially. But if you are looking to worry about mergers that might not happen, there are plenty of other transactions besides the Bankers Trust one that might go bust. Here are the odds from some speculators I know that certain high visibility deals will be completed: 3-to-1: Those are the odds speculators are giving for the merger of Mobil and Exxon happening. Say what you will about the low price of oil and gasoline, but someday the energy market will turn around (it always does) and antitrust regulators in Washington will be rightfully concerned about this deal's long-term impact. 9-to-1: Bell Atlantic will probably be able to purchase GTE Corp. But there is still enough of a chance that regulators haven't fallen asleep to make it more uncertain than Wall Street would like. 6-to-1: America Online will probably be able to buy Netscape. But once again, the fast money on Wall Street is pretty nervous that the two Internet giants won't make it all the way to the altar. The weakness in Internet-related stocks of late won't help. The key factor in all these transactions getting done will be how the stock market behaves. If the market bucks the normal December trend and weakens substantially, then deals will be collapsing left and right.