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Yeah but that provides a psychological bounce not a fundemental reason for
recovery. Watch the GDP numbers. If we slide into an official recession
than the negative sentiment will likely push us down for a while.
I would not try to predict when things will get better but rather watch
for when the worst is over. When things can't get much worse, they won't
... and The Street will see this as a recovery in the cards.
Predicting the future is profitable when it works, but if you aren't
right, then you've just condemned your assets to dead money or losses.
But what do I know... I'm no "professional trader".
-- John
On Mon, 12 Nov 2001, Norman Winski wrote:
> Bruce,
>
> I am looking for a good bounce into the new year. Holiday shopping
> should be better that expected. Bin Laden should be captured or killed
> circa February.
>
> Cheers,
>
> Norman
> ----- Original Message -----
> From: <bruce.larson@xxxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Monday, November 12, 2001 10:25 PM
> Subject: Re: [RT] Layoff's continue to increase
>
>
> > So Norm: how long do you expect this recovery to last? I'm assuming
> > you're talking about a few years since you're calling it an economic
> > recovery and not just some bounce. I would have expected that Saturn
> > Pluto opposition into next May to temper your enthusiasm at least
> > until next summer. Now you got me scratchin' my head.
> >
> >
> > --- In realtraders@xxxx, "Norman Winski" <nwinski@xxxx> wrote:
> > > M Simms,
> > >
> > > I don't find that concept so unusual. The stock market tends to
> > over
> > > discount possible future events in both directions. During the very
> > cyclic
> > > 60s and 70s, Nobel Prize winning economist Paul Samuelson said that
> > the
> > > stock market had forecast 11 of the past 6 recessions. On the
> > other side of
> > > the coin, it was very unlikely that the Japanese economy would meet
> > the late
> > > 80s expectations reflected by the 100 and 200 price to earnings
> > ratios of
> > > many of their leading stocks even during prosperous times. The
> > result is
> > > that their stock market bubble is still unwinding. It took 25 years
> > for the
> > > DJIA to get back to even after the 1929 peak. In reference to
> > > our NASDAQ and the unwinding of the 2k internet bubble, I quote
> > Karen
> > > Carpenter, "We've only just begun". A good analogy would be to
> > check the
> > > performance of the growth stocks of the late 1920s such as RCA and
> > GM. and
> > > plot their performance for the ensuing 30 years. Yes, given the
> > right
> > > timing one could have made an excellent return buying these stocks,
> > but that
> > > "IF" is the "if" that made all of the difference.
> > >
> > > What this means for the next few years is that even if we get a
> > few
> > > boomlets, the stock market is likely to underperform the underylying
> > > economic results. This is due to major forces now coverging that
> > should
> > > cause a major long term contraction of price earnings ratios. These
> > forces
> > > are 1) stock PEs are historically way overpriced despite an 18 month
> > > correction. 2) Major fiscal and eocnomic stimulus is the current
> > only hope
> > > to revive this economy and avert a possible depression. This
> > stimulus isn't
> > > free and will come from borrowing from the future. It will also
> > cause some
> > > inflation if and when there is any economic recovery. The ensuing
> > inflation
> > > will cause further PE contraction because PE ratios are optimized
> > when there
> > > is a very low inflation rate. We can expect an economy more like
> > the late
> > > 60s and early 70s for the next few years. After the current
> > recovery, which
> > > I think may have begun last week, we can expect a bigger and deeper
> > > recession which may result in the stock market getting market down
> > to a
> > > median historical level in terms of valuatoin.
> > > So, how does one make money in this enviroment? In order to play
> > the
> > > coming economic recovery, forget about over valued high PE stocks.
> > You will
> > > have to be very selective if you buy stocks and hope to make a good
> > return
> > > on the long side. The best bet currently is to invest in one of
> > the several
> > > very depressed commodities such as Coffee, Cotton, Copper,
> > Soybeans, Sugar,
> > > or Silver. All of these markets could easily appreciate 50% and
> > barely get
> > > back to prices that they were trading 30 year ago. Check it out.
> > Save this
> > > note and check back in February 2002.
> > >
> > > Cheers,
> > >
> > > Norman
> > >
> > >
> > > ----- Original Message -----
> > > From: "M. Simms" <prosys@xxxx>
> > > To: <realtraders@xxxx>
> > > Sent: Monday, November 12, 2001 3:36 PM
> > > Subject: RE: [RT] Layoff's continue to increase
> > >
> > >
> > > > Hmmm....attached chart shows the Nikkei average down 70% since
> > 1990.
> > > > I guess their stock market acts independent of their economy
> > then ?
> > > > Wow - that's a first.
> > > >
> > > > > -----Original Message-----
> > > > > From: bruce.larson@xxxx [mailto:bruce.larson@x...]
> > > > > Sent: Monday, November 12, 2001 2:14 PM
> > > > > To: realtraders@xxxx
> > > > > Subject: Re: [RT] Layoff's continue to increase
> > > > >
> > > > >
> > > > > That's a popular misconception. Japan's gdp growth outstripped
> > that
> > > > > of the US for the first half of the 90s. Real estate did OK in
> > the
> > > > > early 90s as well. Initially, the pain was isolated to the
> > stock
> > > > > market. Yen strength into 1995 which interestingly coincided
> > with
> > > > > the Kobe earthquake and Nick Leeson hit hard. Short-term rates
> > were
> > > > > 3-4% from 1986-89, they were 3-4% in 1992-93. Short rates
> > dipped
> > > > > below 1% after 1995.
> > > > > You know what I also find interesting? Everytime I talk to
> > people I
> > > > > know in Japan, they say its business as usual. Its primarily
> > > > > manufacturing and brokerage that are suffering. Otherwise,
> > Tokyo is
> > > > > bustling. I remember in the go-go 80s these same people said
> > the
> > > > > stock market boom didn't really effect them either. Just made
> > real
> > > > > estate prices sky-high. But they already owned homes and
> > weren't
> > > > > planning on moving so it didn't make any difference. For
> > others,
> > > > > what was then beyond their reach is now affordable. If you
> > leveraged
> > > > > your home and bought more real estate or stocks at the late 80
> > early
> > > > > 90s mania you're screwed. No different than the Nasdaq mania.
> > If
> > > > > you weren't in it, you never got rich nor poor. Just a sonic
> > boom
> > > > > that rattled the windows. I'm sure if you bought Silicon
> > Valley real
> > > > > estate in the mid-90s, your home has doubled in value. The only
> > > > > people worried are those that bought in the past 2 years.
> > > > >
> > > > >
> > > > > --- In realtraders@xxxx, "M. Simms" <prosys@xxxx> wrote:
> > > > > > Yeah, that's exactly what happened to Japan.....interest
> > rates went
> > > > > to zero,
> > > > > > prices went to near-zero......and they've been in recession
> > for 10
> > > > > YEARS.
> > > > > >
> > > > > >
> > > > > > > -----Original Message-----
> > > > > > > From: bruce.larson@xxxx [mailto:bruce.larson@x...]
> > > > > > > Sent: Monday, November 12, 2001 12:33 PM
> > > > > > > To: realtraders@xxxx
> > > > > > > Subject: Re: [RT] Layoff's continue to increase
> > > > > > >
> > > > > > >
> > > > > > > Sorry but I'm simply astonished at how cheap everything
> > is. The
> > > > > rest
> > > > > > > of the US pumps its gas for 90c-$1.30/gal. We were all
> > > > > incredulous
> > > > > > > the other day that our favorite PapaJohn's pizza is
> > offering 2
> > > > > large
> > > > > > > pizzas for $12.99. I used to pay $15 for one large pizza at
> > > > > > > RoundTable 20 years ago. My wife is going crazy buying
> > clothes
> > > > > > > because they are giving'em away. Everyone in my
> > neighborhood
> > > > > bought
> > > > > > > brand new Mercedes from their 5% cashout refis. Mortgage
> > rates
> > > > > are
> > > > > > > down making everything more affordable, tax rates are going
> > down
> > > > > > > making everything more affordable, airfares appear half
> > price
> > > > > from a
> > > > > > > few months back, zero interest rates and deferred payments
> > on
> > > > > > > everything from cars to computers to furtniture, soon
> > everything
> > > > > will
> > > > > > > be free.
> > > > > > >
> > > > > > > --- In realtraders@xxxx, Ira Tunik <irat@xxxx> wrote:
> > > > > > > > In the bay area a lot of high priced people have been
> > laid off.
> > > > > > > 500 from
> > > > > > > > Medtronics, several hundred from Agilent, and many of the
> > > > > telecom
> > > > > > > companies
> > > > > > > > have folded their tents. Some of the big telecom
> > companies have
> > > > > > > laid off
> > > > > > > > hundreds. Those $700,000 to million dollar homes that
> > where
> > > > > going
> > > > > > > like hot
> > > > > > > > cakes last year might just come back on the market. Even
> > the
> > > > > wine
> > > > > > > industry
> > > > > > > > which is big in Sonoma and Napa counties is taking a hit
> > with
> > > > > > > layoffs. Yet
> > > > > > > > the owners of retail space keep raising the rents,
> > Apartment
> > > > > houses
> > > > > > > have a 2%
> > > > > > > > vacancy factor and their rents keep climbing. Everyone
> > says
> > > > > that
> > > > > > > we are in a
> > > > > > > > deflationary spiral and prices are coming down. Air fares
> > are
> > > > > > > supposed to be
> > > > > > > > a bargain. forget it. Checked on flights to Hawaii, they
> > are
> > > > > twice
> > > > > > > what they
> > > > > > > > were the last time I went just over a year ago. I am
> > wondering
> > > > > > > what good the
> > > > > > > > producer price index is when we import almost everything
> > we use.
> > > > > > > Cloths and
> > > > > > > > shoes from the far east, food and vegetables from South
> > America
> > > > > and
> > > > > > > > Australia, timber from Canada, oil from the middle east,
> > > > > > > electronics from the
> > > > > > > > far east and auto parts from all over. We do produce
> > missiles
> > > > > and
> > > > > > > airplanes
> > > > > > > > here and I am sure that every household has at least two
> > or
> > > > > three
> > > > > > > of each.
> > > > > > > > The made in America symbol means very little. It should
> > read,
> > > > > > > assembled in
> > > > > > > > America, parts made elsewhere. So when you see all those
> > fancy
> > > > > > > numbers, look
> > > > > > > > at the balance of payments and see where your dollars are
> > really
> > > > > > > going. Of
> > > > > > > > course gas prices are back down to $1.75, a real bargain.
> > > > > Medical
> > > > > > > costs are
> > > > > > > > up, health insurance costs are up, dental work costs more,
> > > > > almost
> > > > > > > everything
> > > > > > > > you buy to sustain life is up in cost. Of course you can
> > buy a
> > > > > 2
> > > > > > > MHz
> > > > > > > > computer for under $2000 and that is proof that prices are
> > > > > coming
> > > > > > > down. How
> > > > > > > > many of you buy a computer on a weekly basis? Is it
> > really 0%
> > > > > > > financing on a
> > > > > > > > new car or is the cost hidden in the price? What is
> > truth and
> > > > > what
> > > > > > > is
> > > > > > > > fiction in the numbers that are thrown our way? Could you
> > > > > maintain
> > > > > > > the same
> > > > > > > > life style on last years income or on the income from 5
> > years
> > > > > ago?
> > > > > > > As the
> > > > > > > > powers say, we haven't had any inflation for the past 5
> > years.
> > > > > Is
> > > > > > > there any
> > > > > > > > correlation between the governments CPI, PPI and
> > inflation
> > > > > numbers
> > > > > > > and the
> > > > > > > > cost of living. They produce the numbers, we have to pay
> > to
> > > > > live.
> > > > > > > Oh, yes.
> > > > > > > > You did get a tax rebate and immediately went out and
> > bought
> > > > > that
> > > > > > > cabin
> > > > > > > > cruiser you where looking at with all that money the
> > government
> > > > > > > returned to
> > > > > > > > you. Have a good week. Ira.
> > > > > > > >
> > > > > > > >
> > > > > > > > bruce.larson@xxxx wrote:
> > > > > > > >
> > > > > > > > > I've read plenty about hospitality and tourism being
> > hit in
> > > > > Orange
> > > > > > > > > County(Disneyland) where I live. But these are all
> > minimum
> > > > > wage
> > > > > > > jobs
> > > > > > > > > (restaurants, airlines, hotels) where there was a labor
> > > > > shortage
> > > > > > > > > several months back. These aren't people who buy
> > expensive
> > > > > homes
> > > > > > > and
> > > > > > > > > cars.
> > > > > > > > >
> > > > > > > > > --- In realtraders@xxxx, "Me Tarzan" <ibe98765@xxxx>
> > wrote:
> > > > > > > > > > "I, for one, don't personally know anyone who is out
> > of a
> > > > > job"
> > > > > > > > > >
> > > > > > > > > > Consider yourself lucky. I know way too many. With
> > all the
> > > > > > > > > defense
> > > > > > > > > > spending going on, So. CA might not get hot too bad.
> > But
> > > > > IMO,
> > > > > > > the
> > > > > > > > > SF
> > > > > > > > > > Bay area is the harbinger for much of the rest of the
> > > > > country in
> > > > > > > > > this
> > > > > > > > > > regard. We even have a web site for out of work
> > people to
> > > > > get
> > > > > > > > > > together and do other activities <g>
> > > > > > > > > (http://www.recessioncamp.com).
> > > > > > > > > > I'm a few miles from SF Airport where United Airlines
> > has a
> > > > > > > major
> > > > > > > > > > hub. They have laid off a good number of people
> > here. I
> > > > > hear
> > > > > > > that
> > > > > > > > > > In-n-Out burgers has lowered their starting hourly
> > rate from
> > > > > > > $10/hr
> > > > > > > > > > to $8 because their are so many candidates. Hotels
> > are
> > > > > mostly
> > > > > > > less
> > > > > > > > > > than 50% full and are laying off or cutting back the
> > hours
> > > > > of
> > > > > > > > > > workers. Restaurants are cutting staff because
> > people are
> > > > > not
> > > > > > > > > eating
> > > > > > > > > > out as much or spending as much when they do. There
> > are
> > > > > rental
> > > > > > > > > > vacancy signs all over my neighborhood as people
> > without
> > > > > jobs
> > > > > > > have
> > > > > > > > > > either moved in with someone else or left the area.
> > > > > Recruiters
> > > > > > > are
> > > > > > > > > > going out of business left and right, saying
> > businesses are
> > > > > not
> > > > > > > > > > hiring. People are hurting.
> > > > > > > > > >
> > > > > > > > > > As to the unemployment numbers and 5.4% being lower
> > than
> > > > > what
> > > > > > > was
> > > > > > > > > > previously accepted - that was a different time.
> > We've
> > > > > built
> > > > > > > our
> > > > > > > > > > current economy around low unemployment. People
> > expecting
> > > > > to
> > > > > > > > > always
> > > > > > > > > > be able to find work went out on a limb to buy
> > expensive
> > > > > houses,
> > > > > > > > > cars
> > > > > > > > > > and take 2 vacations a year. That drove the economy
> > forward
> > > > > > > across
> > > > > > > > > > all industries. But up here, it generally takes two
> > working
> > > > > > > people
> > > > > > > > > > to even begin to afford a mortgage. What happens
> > when at
> > > > > least
> > > > > > > one
> > > > > > > > > > of those people loses their job? Bad news cascades
> > and not
> > > > > > > only do
> > > > > > > > > > people not by houses and cars, but they cut back on
> > other
> > > > > > > spending
> > > > > > > > > as
> > > > > > > > > > well. Predictions I have seen are for unemployment
> > to hit
> > > > > 6%
> > > > > > > when
> > > > > > > > > it
> > > > > > > > > > the numbers are next reported.
> > > > > > > > > >
> > > > > > > > > > Here's a good economic link with a lot of info on
> > > > > unemployment
> > > > > > > that
> > > > > > > > > I
> > > > > > > > > > recently came across:
> > > > > > > > > > http://www.epinet.org/
> > > > > > > > > > --- In realtraders@xxxx, bruce.larson@xxxx wrote:
> > > > > > > > > > > I've been reading about massive corporate lay-offs
> > esp
> > > > > > > associated
> > > > > > > > > > > with banking mergers for the past 5 years. Seemed
> > > > > everyone
> > > > > > > just
> > > > > > > > > > got
> > > > > > > > > > > a big fat severance package and turned around and
> > got
> > > > > another
> > > > > > > job
> > > > > > > > > > for
> > > > > > > > > > > more money. Otherwise they got rehired as
> > consultants for
> > > > > > > better
> > > > > > > > > > > pay. I suppose the payrolls and claims data are
> > > > > confirming
> > > > > > > the
> > > > > > > > > > > negative news reports for the past several months.
> > But
> > > > > on the
> > > > > > > > > > other
> > > > > > > > > > > hand, a 5.4% unemployment rate is far below the
> > previous
> > > > > 6%
> > > > > > > > > > standard
> > > > > > > > > > > of NAIRU(non-accelerating inflationary rate of
> > > > > unemployemnt)
> > > > > > > > > > commonly
> > > > > > > > > > > accepted in the early 90s. I, for one, don't
> > personally
> > > > > know
> > > > > > > > > > anyone
> > > > > > > > > > > who is out of a job. Aside from some furniture
> > chain
> > > > > store
> > > > > > > > > > closures,
> > > > > > > > > > > I really don't see much evidence of a slowdown out
> > here in
> > > > > > > > > southern
> > > > > > > > > > > California...yet.
> > > > > > > > > > >
> > > > > > > > > > >
> > > > > > > > > > > --- In realtraders@xxxx, "Norman Winski"
> > <nwinski@xxxx>
> > > > > wrote:
> > > > > > > > > > > > Me,
> > > > > > > > > > > >
> > > > > > > > > > > > I am forecasting a better than expected holiday
> > > > > shopping
> > > > > > > > > > > > season. The US economiy bottomed last week. You
> > will
> > > > > hear
> > > > > > > about
> > > > > > > > > > > > it in February.
> > > > > > > > > > > >
> > > > > > > > > > > > Cheers,
> > > > > > > > > > > >
> > > > > > > > > > > > Norman
> > > > > > > > > > > >
> > > > > > > > > > > > ----- Original Message -----
> > > > > > > > > > > > From: "Me Tarzan" <ibe98765@xxxx>
> > > > > > > > > > > > To: <realtraders@xxxx>
> > > > > > > > > > > > Sent: Saturday, November 10, 2001 1:50 AM
> > > > > > > > > > > > Subject: [RT] Layoff's continue to increase
> > > > > > > > > > > >
> > > > > > > > > > > >
> > > > > > > > > > > > > Each layoff likely removes one more shopper for
> > the
> > > > > Xmas
> > > > > > > > > > season...
> > > > > > > > > > > > >
> > > > > > > > > > > > > http://www.msnbc.com/news/555872.asp?cp1=1
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > > To unsubscribe from this group, send an email
> > to:
> > > > > > > > > > > > > realtraders-unsubscribe@xxxx
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > >
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> > >
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--
__________________________________________________________
John T. Nelson | John's Trading Journal
trader@xxxxxxxxxxxxxxx | http://trader.computation.org/
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