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One of the key words I believe is TRUST. Markets live with all sorts of
uncertainties, half truths and outright misinterpretations as long as it trusts
that things are "under control". Reading the various 1929 stories, books,
articles I found, one phrase that always came back was "things are under
control". Indeed things only started to go sour when it became apparent they no
longer weren't.
In today's world, it seems the markets have placed tremendous faith in
Greenspan. He is the one person who engineered growth at no inflation. While
the methods used are the subject of a harsh debate, the results are there for
the moment. It remains to be seen what the final bill is going to be. But the
way we take care of this bill is going to be determined by the amount of
continued trust in our financial leadership.
If I am right Greenspan is to go next year. Like every other central banker,
the next one is going to be under scrutiny, ie the markets will test him. What
will we do then...? Added to the fact that Summers is viewed as being less of a
smooth decision maker than Rubin, my best guess is that's where the dangers lie
for next year: Major uncertainties about the capacities of our future financial
leaders to manoeuver this huge and tricky cargo ship without hitting
anything... At least this could be an axcellent excuse. In the end though,
presidential election years typically close positive, so that would imply
volatility, but up. Like this year?
Gwenn
| -----Ursprungliche Nachricht-----
| Von: swp [SMTP:swp@xxxxxxxxxx]
| Gesendet am: Wednesday, October 06, 1999 1:41 PM
| An: Dennis L. Conn; BruceB; Earl Adamy; RealTraders Discussion Group;
| serenity-trading@xxxxxxxxxxx
| Betreff: [serenity-trading] Re: FOMC meeting?
|
| 50% margin is what you can get directly from your mainstream brokerage firm.
| But, I believe (I am not 100% sure of this) that day trading shops permit
| somewhat greater leverage as the margin rules essentially go into effect once
| the day is over - or that is when a margin Reg-T call is required. Remember,
| you can buy stock and pay for it a couple of days later.
|
| Beyond that, of course there are other ways of unofficial leverage: There are
| people borrowing out of their 401Ks and going on margin in current cash and
| huge sums being invested on margin with money borrowed on their homes.
|
| There are certainly huge risks right now, no question about it, but my charts
| do not show a crash or depression in the next few months. I am worried about
| during 2000 when after a 50-75 bp improvement in yields, that they show
| potential to move to 6.75/7.00%.
|
| The bottom line is that the Fed is well aware of the problems and is working
| overtime to try and fix it. They are not gods and if the market is going to
| crash, unfortunately, it will. Note though that when Japan's market fell 70%,
| there was no rioting in the streets, there were no bread lines and it was not
| the end of the world. I suspect, if it were to happen here (which I do not
| expect), there will be significant deliterious affects, but we will come
| through it, just as Japan ultimately will.
|
| For those that are interested, I am attaching a pdf file of an article by a
| brilliant analyst I know :-). It discusses the Fed's current posture towards
| the stock market. Please remember that the Fed's main concern is not
| equities, but the economy as a whole, but stox are an increasingly important
| part of the equation.
|
| ---
| Steven W. Poser, President
| Poser Global Market Strategies Inc.
|
| url: http://www.poserglobal.com
| email: swp@xxxxxxxxxxxxxxx
|
| Tel: 201-995-0845
| Fax: 201-995-0846
| ----- Original Message -----
| From: Dennis L. Conn
| To: BruceB ; Earl Adamy ; RealTraders Discussion Group
| Sent: Tuesday, October 05, 1999 11:23 PM
| Subject: Re: FOMC meeting?
|
|
| Bruce B. wrote:
|
| Today margin is limited to 50%, and US investors as a whole haven't even
| come close to using that amount (no margin allowed in IRAs and 401Ks).
|
| I too was under the impression that there was a 50% limit, but I have a
| friend who claims he can get 20%. I don't trade equities, so maybe someone
| else can comment on my friend's claim.
|
| Dennis C.
|
|
| ------------------------------------------------------------------------
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|
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Status:
The press reports that it has been specs who've been liquidating longs. But
then, I didn't check with Metropole and those guys are really good. <g>
Scheier
Howard Hopkins wrote:
> RT's,
>
> Yesterday I asked trader's opinions on Sugar, results follow:
>
> Total responses: 6
> Traders who are short: 3 (myself included)
> Traders who are long: 2
>
> and one trader was looking for a short term pull back to go long.
>
> Hope this helps. It helps me because I'm glad to see everyone isn't short.
>
> Howard
>
> ______________________________________________________
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