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At 06:26 PM 8/31/98 -0500, Val Clancy wrote:
>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.
>
>
I think this market has been a money driven market from the smaller
investor and the million k1 plans for so long with 20 and 30 per cent
returns it lost reason long ago. The markets in the past were from people
who normally invested in markets but today we got the money market and t
bill buyers. In the past couple of years the gurus had to eat their words
because the small investor just had more money to stop even the slightest
correction. The market would start to correct and a wall of money would
drive it right back up. Greed has been stomping over any and all concerns
about the world economy like it did with Asia and Japan. New terms where
starting to emerge about how the values weren't high on US companies
because this was a new economy. Now Russia is busting out with no
leadership and no money and the no leadership makes it hard to help them.
People there have run the banks and hoarding food staples now, Russia is
not going to get well this time. I was in the 87 crash and panic is very
weird it comes like a tornado you can see the fear in peoples eyes as they
were selling stocks and taking money out of the money markets. Real fear
was even for the money markets that maybe for the first time it might trade
below a dollar. This market is different now because its so much bigger and
so much higher and fueled by so many small investors. Smart and big money
stop the 87 crash and turn the small investor back into buyers. Tension is
high at all the major brokerage houses around the country tonight brokers
are in meetings with management anticipating customer confidence failing. A
bear markets okay and a correction is okay but mass panic selling is a real
treat and that's not okay and really could lead us right into a depression.
We all might look back and say what was all the fuss knew we had to have a
correction. After all this is the oldest bull market in history so we had a
correction now were back to normal again. I don't know something feels
different to me this time and its not a good feeling. Again panic is a very
real and scary thing when you've seen it in the masses it feeds on itself
like some kind of monster something once seen you never forget. Night
trading has the S&P up 17.50 but it was up last night as well. Tomorrow
will be important day and probably will be okay but its scary to get this
close to a melt down.
Robert
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