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Strategies & Market Trends : The Stock Market Bubble -- Ignore unavailable to you. Want to Upgrade?

To: Ted M who wrote (2514)	1/10/1999 8:23:00 PM
From: Terry Whitman	Respond to of 3339

Interesting picture. There is no doubt that the bubble has manifested itself into a few favored stocks at this point. That fact has allowed the major indexes to maintain a healthy look on the surface. It is still a bubble IMO, because the big money is in these top performers. Inflation is sneaking up on us. All that free money that Greenspam printed is beginning to reverse the deflationary trend. Note the following trends over the last few weeks: - higher commodity prices (soft and hard) tfc-charts.w2d.com iqc.com - rising employee compensation - falling dollar decisionpoint.com Regards, TW

To: Ted M who wrote (2514)	1/11/1999 8:55:00 AM
From: Terry Whitman	Read Replies (1) \| Respond to of 3339

Briefing.com joins the growing list of bubble believers. From today's Stock Brief: <<Our concern is that this bubble's days are numbered, and that when it pops, it will take the overall market down with it, just as it supported the market on the way up. When that pop occurs is very hard to guess, though it would seem likely prior to mid-year for one important reason -- the Fed will eventually step into the deflate this bubble if it continues to expand. A number of Fed officials have already been warning about stock market valuations, but thus far we have not heard from Chairman Greenspan. He testifies before a House Committee on January 20, and what is typically a bond market event might have equity market implications as well on this occasion. Though the Fed will say that it does not have a target for stock prices, policy makers do recognize the dangerous consequences of a bubble for the real economy. The long fall of the Nikkei from 38,916 on December 29, 1989 to today's 13,392 offers a recent lesson in just how large a bubble can become and how severe its aftermath can be. (and trust us -- everyone in Japan thought that the Nikkei was invincible and that the old rules no longer applied on December 29, 1989) The Fed is well aware of this lesson even if most US equity investors are not. Don't be surprised if Greenspan offers us a history lesson soon, and if he threatens (explicitly or implicitly) to raise rates if the stock market bubble continues to expand.>>