Bear Market/Slide into Depression/Correction

[Val Clancy <valclancy@xxxxxxxxxxxxx>]

List,
Here is my  observation based on some simple fundamentals:

Textbook fundamentals of Bear Market:
- Bad Economy - contracting.
- Inflation
- High interest rates
- Falling Stock Market

Text Book fundamentals of Depression:
- Bad Economy - collapsed
- Deflation
- Low Interest Rates
- Falling Stock Market

Present time situation:
- Good Economy
- Deflation or Low Inflation
- Low Interest Rates
- Falling Stock Market

Analysis based on the above:
- lower probability of Bear Market
    1 point ( Falling Stock Market ) against
    3 points( Good economy, No inflation, Low interest rates )
- higher probability of slipping into Depression
    3 ( Deflation, Low interest rates, Falling Stock Market ) against
    1 ( Good Economy )

Summary:
The analysis tell that we are either  in healthy Correction
or slipping into Depression and not in Bear Market.
Depression: there is only one point that keeps us away from it -
collapsing economy. Emerging Markets economies are collapsing.
Western economies are OK. If we have a collapse of the American
economy that will  put us right into the depression.
Otherwise we are correcting at the moment.

If the US economy holds up through the end of 1998 and there is
no panic selling we are OK.
If the US economy starts collapsing - we are dead meat.
Comments, questions?

Val.