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Couldn't agree more. I do feel, though, that bonds want to punish the Fed
a little more before a real rally starts. Doesn't really look like it
today, but we have a few Greenspan speeches and ECI this week yet.
> -----Original Message-----
> From: Gwenael Gautier [mailto:ggautier@xxxxxxxxxxx]
> Sent: Wednesday, January 26, 2000 2:13 AM
> To: Michael_Knapp/DRW@xxxxxxxxxxxxxx
> Cc: List RT
> Subject: Re: [RT] Reality
>
>
>
>
> Reality is indeed what we make it. Now, I am not sure yet how to
> apply that
> in
> the everyday markets: Is it that being so afraid of overvaluation it is
> already
> discounted, or will it become so? Is that there may be inflation
> (which has
> been
> the case for 4 years already) is already discounted or will it become so?
>
> I tend to observe that at times when we most anticipated things,
> they were
> in
> fact already fully discounted (good examples are pre-crash of 1987
> euphoria,
> post crash gloom, pre Gulf war start gloom or recently rate gloom in
> october
> 99). So I am wondering if inflation jitters are not more than discounted
> already. After all bonds slumped more than for the Peso crisis
> which was a
> much
> more threatening piece, and 99 was the worst or second worst year ever: I
> call
> that exageration or at least great anticipation of the worst possible
> outcome,
> and find it quite overdone. It is always when people most dread something
> (y2k....) that that something is actually already in place, and
> things turn
> out
> quite differently. Every body sees the wide gap between slumping bonds and
> rising stocks, and everybody expects stocks to surrender. Press and
> analysts
> coverage is unanimous on that matter. Well I venture to think, we might
> have a
> sideways overall stock market (with lots of rotations) while bonds rise
> slowly
> with the different Fed raises over the next months.
> Then sometime in 2001 or 2002 it all boosts to big new highs again...
>
> How about that?
>
>
>
>
> mknapp@xxxxxxxxxxxxxx wrote:
>
> > As a child, my mother used to chastise me that if I made faces, those
> faces
> > would eventually stay that way. That's how I view inflation. Enough
> people
> > are frowning inflation, it will eventually rear it's ugly head.
> Reality
> is
> > what we make it. If we believe there's inflation, we WILL create it.
> >
> > scrunched facingly,
> >
> > Mike Knapp
> >
> > > -----Original Message-----
> > > From: Gwenael Gautier [mailto:ggautier@xxxxxxxxxxx]
> > > Sent: Tuesday, January 25, 2000 11:35 AM
> > > To: realtraders@xxxxxxxxxxxxxxx
> > > Subject: [RT] Re: Intra day hi in market, abondon ship
> > >
> > >
> > >
> > >
> > > Dow has made no net movement in 9 months... As for Naz, it seems
> > > Dow stocks
> > > are
> > > hit as badly by rate jitters than Naz. It is not that the Naz is
> > > the badie,
> > > and
> > > Dow the goodie... They are all getting the same treatment, so what's
> the
> > > point
> > > owning old blue chips, if downside is same and upside is limited?
> > >
> > > If fund managers want to have performance, sooner or later
> they'll come
> > > back to
> > > where the growth is. Even more so in a high rate environment
> which will
> > > make a
> > > hell of a difference for GE, much less for JDS Uniphase. It
> is also to
> be
> > > noted
> > > that in a high rate environment, low margin or old world
> > > businesses will be
> > > even
> > > more pressured to reduce costs, and will invest even more in tech to
> > > achieve
> > > that...
> > >
> > > In any case consensus never works, and right now consensus is Tech is
> too
> > > high,
> > > rates are rising, inflation is looming, value is undervalued. I
> > > don't know
> > > which
> > > way things will go, but for sure it won't be the above.
> > >
> > > Just food for thought
> > >
> > > Gwenn
> > >
> > >
> > > Daniel Goncharoff wrote:
> > >
> > > > ..which was the last trough. I think the bearishness is easily
> > > explained
> > > by
> > > > the breakout of the Naz over the past three months. It has to stop
> > > sometime,
> > > > and once that happens, it will probably restrain the Dow around it.
> > > >
> > > > If the Naz dropped 100 points a week for the next 4 weeks,
> that would
> > > only be
> > > > a slight correction, and the Dow only has to hang out in the
> > > 11500-10500
> > > area
> > > > to allow for some convergence.
> > > >
> > > > Regards
> > > > DanG
> > > >
> > > > G
> > >
> > >
> > >
>
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