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> From: Renate Muldowney <mailbox@xxxxxxxxxx>
> To: johnstev@xxxxxxxxxxxxxxxxxxx
> Subject: Re: Bull mania alive & well
> Date: Tuesday, June 23, 1998 12:52 PM
>
> There are 2 differences between the 1920's and now.
At least! This sounds like raving paranoia, but "market analyst" Nick
Guarino's latest Wall Street Underground newsletter opines that the US is
being set up for a fall by the powerful forces working to create a World
Government (not mentioned by name, but I assume he refers to the Bilderberg
Group & the Tri-lateral Commission), with the collusion of Bill Clinton!
Sounds crazy, but so does giving ICBM tech to the Chinese!
> 1) The huge drop in oil prices which affects the costs of everything.
Yes. I was surprised to learn a little while ago that the #2 producer in
the world is Norway, a non-OPEC member which is not going along with
cut-backs. Also Russia is pumping away for all she's worth due to the
crisis there. OPEC only controls ~40% of world supply so they lack the
clout they enjoyed in the '70's. But most new oil is way more dear than
$13/bbl to produce (estimates are $20-$21/bbl), so Norway's profit margin
on N. Sea oil must be pretty thin. Somethings got to give!
>
> 2) The legislated higher stock market
> The higher stock market was legislated in the U.S. several years ago
> and more recently in Germany.
> Some called it the retierment plan legislation ..401k etc.
> This legislation recently came through in europe.
> The next piece of legislation and perhaps the final piece is when
> Social Security is in stocks.
> I will never forget my grand mothers fear of "the inflation"....not
> just a little like we had under carter buy big time
> like in europe in the 1930's.
I think poor Jimmie gets a bad rap there, due to circumstances beyond his
control, ie: OPEC embargo, Iran hostage crisis. Maybe he was too nice a
guy to be Pres in a nasty world, but he was easily the most decent man to
hold office in my memory. Remember the furore over "lusted in my heart"?
Pretty tame compared to Wild Bill, eh?! The book goes into 401k etc. as
well. The Investment Company Act of 1940 brought in to answer the abuses of
the Trusts has been pretty well "modernized" (ie: gutted) now, and also was
circumvented in the go-go '60's with disastrous results. But, they tell me
it'll be different this time (hmmm, sounds familiar)!
> Who was it that said " When the market reaches an unsustainable level of
> absurdity the turn is at hand" ?
> So where do we invest in to make big bucks in 10 - 20 years from now?
> When is the time to buy oil stocks?
Don't know, but it sounds pretty apt at this moment. Calling a top is never
easy, but this one seems especially elusive. I felt we'd reached that level
of absurdity some time ago, but the $$ just keep pouring in. The money Oil
companies are losing on the low price is being offset by the money they are
making in the Stock Mkt, so the two go hand in hand for now.
>
>
> An extention of Harry Dent's theory is looked at in an article on
> http://www.bemore.com/newpage138.htm
Thanks, I'll check it out!
When the world seems crazy, I think we have to at least consider "crazy"
theories!
Regards
John Stevenson
>
> Perhaps it will give some insight.
>
> regards
> Renate
>
> At 12:15 PM 6/23/98 -0400, you wrote:
> >I picked up a little book the other day called: "How to survive the
coming
> >Mutual Fund Crisis" by Donald Christensen. The book was published in
'94,
> >and predicted the crisis would begin in '96 or '97. He makes some
excellent
> >points on an historical basis and the parallels between today's Mutual
> >Funds and the Investment Trusts of the '20's are pretty striking, but,
as
> >AG stated at his last H-H testimony when pointedly asked if we have a
"New
> >Paradigm", "something different" seems to be happening here, which has,
so
> >far, defied the predictions of everyone (except the Bulls, of course).
> >
> >I think that "something different" is not something that's inherent in
the
> >market itself, but rather due to a unique set of circumstances: the US
> >market is the only major market left standing (maybe the DAX too) and is
> >still attracting huge inflows (as AJ stated), the (myserious?) absence
of
> >inflation where, near the end of a cycle and given tight labour mkts, it
> >should be rearing its ugly head. The "fine balance" AG mentioned a few
> >months ago between inflation & deflation (which, if I recall correctly,
he
> >said "could not be maintained indefinitely") may make the Asian disaster
> >actually a plus (for now, barring further devaluations). The Bulls
> >certainly are spinning that way, and in mkts (as in politics),
perception
> >is reality (up to a point).
> >
> >The author also states that one of the signs of the existence of a Mania
is
> >an unassailable confidence that the present conditions will continue
> >indefinitely. We certainly have that, but it seems to be confined to
Mutual
> >Fund investors only as the still thin volume would seem to indicate that
> >most of the "smart money" is still on the sidelines waiting for this
"fine
> >balance" to break out one way or the other.
> >
> >Anyway, I'm glad, at least, that I'm not the only one who is more than a
> >bit boggled by these "something different" markets.
> >
> >John Stevenson
> >
> >
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