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To: MythMan who wrote (14874)	1/7/1999 9:21:00 AM
From: accountclosed	Respond to of 86076

:-)

To: MythMan who wrote (14874)	1/7/1999 10:05:00 AM
From: wlheatmoon	Respond to of 86076

No crash today. I bet we end up positive. Time to pick up more on the dips. The semis/tech/nets still have herculean strength. EBAY up 19 or so. mike

To: MythMan who wrote (14874)	1/7/1999 10:23:00 AM
From: Defrocked	Respond to of 86076

Regarding MS growth, estimates of 11% are "conservative", ignoring the more recent "greasing" by the monetary authorities. I believe the Fed's recently announced "neutrality" on rate levels will be reexamined this spring. AG's policy of gradualism should point the Fed toward warnings in March and potential 25 bps upticks in May/June. Between now and then, the currency and bond markets will do a little tighten for the Fed as we've seen recently. MS growth has not been this high since the Fed pumped us out of the 81/82 recession. Since 1960, MS growth has run in the double digits only during the 72/73 and 78/79 time periods which, coupled with high government spending, lead to 14% long bond and 20% prime rates. This analogy does not imply, of course, that we'll approach such levels again but does lead one to expect higher-than-existing borrowing costs. This current "golden era" of investing is substantially due to a temporary confluence of positive shocks, such as a strong dollar, low oil, declining computer/communication costs, of which many are not sustainable, especially if the Fed permits the high money growth to continue. We've experienced an enormous "positive surprise" in terms of Fed loosening this fall. In contrast, a "negative surprise" could occur this spring since most market participants believe the Fed will keep lowering rates. If a responsible Fed instead does nothing or bumps up rates, an unexpected,implicit tightening occurs. How equities will react remains to be seen. FWIW. MONEY STOCK Percent change at seasonally adjusted annual rates from 13wks ending: M2 M3 1-Jun-98 Mar. 2, 1998 (13 wks.prev.) 8.2 11.4 Dec. 1, 1997 (26 wks.prev.) 7.9 11.3 June 2, 1997 (52 wks.prev.) 7.0 10.1 24-Aug-98 May 25, 1998 (13 wks.prev.) 5.4 5.6 Feb. 23, 1998 (26 wks.prev.) 6.9 8.5 Aug. 25, 1997 (52 wks.prev.) 7.3 9.6 21-Dec-98 Sep. 21, 1998 (13 wks.prev.) 11.8 13.8 June 22, 1998 (26 wks.prev.) 9.1 10.5 Dec. 22, 1997 (52 wks.prev.) 8.7 11.0