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Extract from <A
href="http://www.alterama.com";>The Global Macro
Letter (<A
href="http://www.alterama.com";>www.alterama.com)
<SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">
<SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">On
Monday, the US Stock markets should open about 12% lower to get in line
with European markets. Our gut feeling is that, then, there will be some
stabilization and possibly an attempted rally that will ultimately fail.
<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office"
/>
<SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: 12.0pt">Regulators
are trying to manipulate the market and that will only trigger higher
volatility. The SEC late Friday waived certain corporate stock
buyback restrictions. Companies would be able to buyback their stock
without meeting ordinary volume and timing restrictions and without incurring
adverse accounting consequences. The loosened rules take effect Monday and will
last throughout the week. Under normal circumstances, a company is barred from
purchasing its stock in the opening transaction or in the last 30 minutes of
trading. And single-day purchases cannot constitute more than 25 percent of the
trading volume. The SEC chief hinted that short-selling would be restricted.
This is manipulation and usually it does not work for long.
<SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA">Longer
term, the bear market will continue. The difference is that we will enter a
full-fledged recession and hopes of a possible recovery have been postponed to
the second half of 2002. That leaves the Stock Markets plenty of time to lose
about 25%.
<SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"> <SPAN
style="FONT-FAMILY: 'Times New Roman'; FONT-SIZE: 10pt; mso-fareast-font-family: 'Times New Roman'; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA"><IMG
style="HEIGHT: 263px; WIDTH: 402px" width=263 v:shapes="_x0000_i1025">
<SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: 11.0pt">This
monthly chart of the S&P cash has been drawn using a logarithmic
scale; in order to reflect the evolution of the market in
percentages.
<SPAN
style="FONT-FAMILY: Arial; FONT-SIZE: 10pt; mso-bidi-font-size: 11.0pt">We
believe that given time, the S&P Cash should break the 930 levels,
and should test a very important uptrend around 890. <SPAN
style="mso-tab-count: 1"> <SPAN
style="mso-spacerun: yes">
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