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Pastimes : The Naked Truth - Big Kahuna a Myth -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (42820)	5/25/1999 2:39:00 PM
From: MythMan	Read Replies (2) \| Respond to of 86076

Dell sure is battling 35, isn't it?

To: Lucretius who wrote (42820)	5/25/1999 3:00:00 PM
From: Joey Two-Cents	Read Replies (1) \| Respond to of 86076

I've been hibernating for the last 7 months and feel it will be safe to come out of hiding real soon. Here's an interesting piece on Capt. Al and his current dilema. Then again with the release of the Cox report maybe a market crash is what the Slickster needs to get the sheeples mind off his treasonous behavior. Historically, the US Treasury market has led stocks. There seems to be a logical reason for this. Generally speaking it is conceded so-called 'smart-money' is better informed and more sophisticated than the millions of John Q. Public who make up the masses buying stocks. The bond leadership was certainly in play in 1987. In March of 1987 the US bond market came to a Screeching halt, while the DOW continued on its cavalier climb to record heights. In fact, while the bond market continued to decline for the next seven months, the DOW went on its merry way, forging new highs UNTIL October 19, 1987. On that fatal day the DOW made the blackest of all ONE DAY DECLINES. It was mercilessly hammered for 23% in just a little over six hours - and the heretofore "high-flyers" were even more decimated. Had it not been for 'Greenspan Magic,' it well might have precipitated another 1929 CRASH. WHAT Greenspan did was exactly what the dying patient needed - a shot of adrenaline directly to the 'heart.' He flooded the market with liquidity by instructing the Fed to BUY TREASURIES. OF COURSE, the Fed's mammoth buying spree caused interest rates to plummet. This is highly significant and relevant to today's market situation. Today's bond market has been telling us since last October (exactly seven months ago) that stocks are well overdue for a nasty correction. And it WILL come. But NOW the 'Greenspan Magic' will NOT work, indeed cannot even be used to correct a 1987 type 23% One Day Loss. It's simple. Just one week ago the CPI inflation indicator registered 0.8% for the last month. On an annual basis thattranslates to an inflation rate of just shy of 10% that has both the Bond Market and Greenspan scared to death. In last week's FOMC meeting, the Fed adopted a tightening posture in its attempt to slow inflation. This means the Fed is close to RAISING INTEREST RATES. RAISING INTEREST RATES I said. THEREFORE, if the market commences an October 1987-like free-fall, the Fed can only stand-by wringing its hands because it cannot use the "medicine" of 1987 (i.e. flooding the market with liquidity by buying Treasuries). If the Fed used this "medicine," it would only stave off the ultimate demise of the stock market as rates would plummet, thus fuelling the raging fires of inflation. A shot of adrenaline would literally kill the patient Greenspan has a slim or no chance of saving a market crash when it comes...