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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club -- Ignore unavailable to you. Want to Upgrade?

To: Investor2 who wrote (3659)	3/7/1999 7:35:00 PM
From: Alan Whirlwind	Read Replies (2) \| Respond to of 15132

Looking at the action in the stockmarket in lieu of robust economic news, falling commodity prices, and continued low inflation, one might seem hardpressed to not see the Dow closing above 10,000 at year's end, and indeed perhaps in sight of 12,000. However, there are some obstacles to be dealt with along the way. 1. Falling commodity prices also means less money for developing countries to spend for trade with the US and to cover loans outstanding to the IMF, which the US heavily subsidizes. 2. Clinton may not survive the year as president. While he has survived numerous scandals, a House impeachment, and a Senate trial without so much as a censure, the latest charge of rape may finally stick. Wherever Clinton travels in the US, angry protesters with signs denouncing rape follow him. It's no wonder he's fled to Central America. It doesn't sound like the protests are going to let up anytime soon. Some feminmists have abandoned their flock and have chosen to believe Juanita Brodderick over Clinton. His support base here is erroding here and Canadians to the north are angry over his role while governor of Arkansas in allowing blood tainted with hepatitis and AIDS to be shipped from Arkansas penitenturies to Canada where scores were infected. One can hardly imagine two more years of a president heckled as a rapist. Resignation may yet follow. 3. A potential Asian recovery will bring higher commodity prices and with the Federal Reserve pumping the money supply as it's been the last 12 months, rising inflation. It's been mostly going into the market--so far. Unemployment remains steady to falling--even at today's multi-decade lows which suggests possible wage/price inflation. 4. Y2K. There are many rumors floating about, massive runs on banks, disruption of power, even a cut off of the world's oil supply. Banks are said to be ready to ration cash withdrawls to $100 cash per transaction at a time when holiday spending warrants free access to personal funds. A bank run anywhere could generate a series of them. The FED has loosened up 60 billion in cash for this event and banks themselves say they are the most ready of any institution for Y2K, but other systems which interact with banks may still cause them problems. Disruption of power could happen anywhere and experts don't really know to what extent. AMTRAK is said to be facing a 60 day shutdown of its various routes to accommodate repairs of down sytems. There is a rumor that the oil industry may be particularly vulnerable with a possible shutdown of 2-3 months of production. On April 1st, the US will begin a project of buying 100,000 barrels of oil per day until the end of the year for its strategic reserves. 30 million barrels in all. Depressed oil prices and the need to help struggling US oil companies has been the excuse so far. But while we are buying cheap oil while blood is running in the streets are we buying to prevent blood from runnning in the streets as well? A combination of these problems over the ensuing year makes a year end Dow of 10,000 a big (?). .