|
PureBytes Links
Trading Reference Links
|
On Fri, 1 Aug 1997 Greatelto@xxxxxxx wrote:
> spending patterns appear weak. Auto sales the last reporting period were
> down 9.5%. Retail sales are also down. The asset backed securities sales by
Auto sales were very strong for quite some time. Maybe there is some
sector rotation here. Re retail sales, perhaps there is a change in
spending patterns from traditional retail to more tech-centric purchase,
as the less technically literate seek to catch up at the expense of other
purchases (wild speculation on my part).
> aggressive lenders has sustained the flow of credit to consumers already
> burdened with debt. Just recently one of these lenders, a subprime auto
> lender, declared bankruptcy leaving $500 million in asset backed securities
> outstanding.
Insuring losers doesn't pay?
> Right now I think the majority of people think the Fed will drop the other
> shoe and raise rates again. At least that was the concern in early July.
> But what if the availability of credit lessens demand for goods and services
> later this year? That would be deflationary. If that is the case, then the
What mechanism would make the availability of credit lessen the demand
for goods? I would think it would make the interest rate of existing debt
cheaper, leading to additional capital for expenditures.
> "classic blowoff" in gold may well not be a blowoff at all, but another down
> leg in price.
>
My guess is that 3Q earnings concerns will drive a downward spiral, while
inflation fears may drive gold up somewhat. I advised my parents to hedge
their positions with puts while the market decides on a future direction.
They have had a particularly good run with MSFT, SUNW, KO, GLX. I am out
for now, having finally learned patience (I hope :-)
> If this all this is relatively correct, then the worry about the Fed raising
> rates is unfounded. Their next move could be to lower rates to combat the
> threat of deflation....which is much the opposite of what people today
> expect. That would make financial stocks (i.e. insurance, etc) a much better
> place to invest than precious metals, etc. Technical analysis confirms this
> theory. Just look at the charts of these groups.
>
> What do you all think out there??
>
Interesting article Jerry, something to think about.
Cheers,
Jim
|