Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Oblomov who wrote (51755)	3/13/1999 12:03:00 PM
From: Mike M2	Read Replies (1) \| Respond to of 132070

AA, not everyone on this thread expects to see product price inflation . The inflation of money and credit primarily went into the financial markets. I do not expect easy Al to tighten but I do expect the markets to tighten credit for lower quality debtors. I also expect a continuation of the decline in corporate profits that we have seen for the last year. The new era thinking bred over confidence and over indebtedness and the process develops into a self reinforcing trend - a bubble until it reaches a point where balance sheets are so strained that a retrenchment in unavoidable. At this point the process of debt liquidation feeds on itself. To see what the future holds look to the past - US 1920's, Japan 80's, SEA since 1997. Mike

To: Oblomov who wrote (51755)	3/13/1999 12:22:00 PM
From: Alias Shrugged	Respond to of 132070

Andrew >>>Why is everyone here so certain that a BK will be precipitated by the re-emergence of inflation? <<< Not "Everyone". Not "Certain". Not necessarily "Inflation". All of the stars have aligned to produce this grossly overinflated stock market. If any of the stars (lack of inflation, strong dollar, increasing earnings, perception of dollar as safe haven, strong economy, manic consumer spending, periodic implosion of rummy currencies, continued weakness of Japan, low interest rates, ascendancy of momentum investing, etc.) fall out of alignment, some of us are fairly certain the market will fall over the edge. Its ironic that the asian contagion and weakness in South America have sent a torrent of dollars here for "safe keeping". Weak currencies have also persuaded foreign producers to keep the proceeds (from selling products to US) here in dollars. In the same way that momentum investors crank up a stock's price beyond a reasonable fundamentals-based level, our dollar has been puffed up beyond fundamentals (and interest rates and commodity prices have been artifically lowered). Investors (of the bullish optimistic variety) usually see a stock's mo-mo juiced stock price as some how justified (look at the oil service/drillers back in Oct 1997) and are shocked at the price plunge when all of the mo-mo money leaves. How much of the stock's price was justified by fundamentals and how much was due to the momentum investing crowd? Same question applies to the US dollar. Where will the buck be when all of the "safe-haven" capital leaves these shores? Mike

To: Oblomov who wrote (51755)	3/13/1999 1:08:00 PM
From: Skeeter Bug	Respond to of 132070

andy, deflation may precipitate it. also, the bk may take a looooooong time from beginning to end. it may not drop 1K, 2K, 3K or 4K in a day or week.

To: Oblomov who wrote (51755)	3/13/1999 1:17:00 PM
From: yard_man	Read Replies (1) \| Respond to of 132070

Re DELL: "Baby, you ain't seen nothin' yet!" I don't think the re-mergence of inflation is a necessary condition for the BK and I also think that a slow grind down from here is pretty unlikely ... when people turn sour on stocks all we need is a few % to turn really sour ... it is a pyramid of illusory wealth.