Here's an excerpt of the lead story from 'The Economist' Oct. 18-24:
"CRASH DAMMIT" If you're pressed for time, skip down & read the last
three sentences and then, SELL DAMMIT!
It is hardly surprising that emerging markets have
recently lost some of their appeal as a means of
diversifying risk. Since their peak in 1993, when
their share prices jumped by an average of 75%,
bad news has marched through most of these new
markets. In 1994-95 the collapse of the Mexican
peso lowered returns from most of Latin America,
and recent months have toppled one currency after
another in East Asia. Several of Eastern Europe’s
currencies now look vulnerable too (see article). As
a group, over the past dozen years, emerging
stockmarkets have under-performed Wall Street. In
principle, this does not invalidate the case for
investing in these markets in order to reduce overall
risk. In practice, it is yet another reason why, having
digested what they think is the lesson from a decade
ago, investors are now in grave danger of driving
Wall Street far too high.
For a second, bigger, reason to worry is that the
apparent lesson of 1987 is wrong: crashes are hardly
ever benign. It is true that the crash of 1987 did little
lasting damage. But a stockmarket slump in Japan in
1990 knocked the stuffing out of its banks and led to
a period of stagnation from which it has still to
emerge. The crash of 1987 was relatively painless
largely because, unlike the Bank of Japan, the
American Fed moved quickly to reassure banks and
to stave off a slump in investment and demand by
easing monetary policy.
At today’s valuations a similar drop in New York
would destroy some $2 trillion of wealth. There is no
guarantee, if this happened, that the Fed would be
able to repeat its damage-averting trick in the
present looser monetary conditions without setting
fire to inflation. In that case, history would repeat
itself as tragedy, and plummeting investors would
find no helpful coil of elastic wrapped around their
feet.
http://www.economist.com/editorial/freeforall/current/index_ld4803.html
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If life is this hopeless, we all might just as well kill ourselves
since we have nothing to live for.
BTW, if you knew the first thing about how the stock exchange works,
you would know that a 1987 style crash is no longer possible.
-john-
--
===========================================================================
John A. Weeks III (612) 891-2382 jwe...@visi.com
Newave Communications FAX 953-4289 http://www.visi.com/~jweeks
===========================================================================
> Friday's market activities will more than likely result in a
> major
> market crash, which will make the crash of ten years ago
> look like 'small potatoes'. If you're wise, you'll get out
> while you can. It's hopeless. After you sell, It'd behoove you
> to give some of the loot to charity. Hope you had fun while
> it lasted!......
>
The market ain't crashin' on Monday. What, are you long OEX puts,
you slopehead?!?
> It is Moday 3.45pm. I listened to John A. Weeks & did not get ouit. Now I
> am WIPED OUT!!
>
> John A. Weeks III <jwe...@visi.com> wrote in article
> <jweeks-2610...@13-52.dynamic.visi.com>...
>
> In article <8778478...@dejanews.com>, hila...@juno.com wrote:
> > Friday's market activities will more than likely result in a major
> > market crash, which will make the crash of ten years ago
> > look like 'small potatoes'. If you're wise, you'll get out
> > while you can. It's hopeless. After you sell, It'd behoove you
> > to give some of the loot to charity. Hope you had fun while
> > it lasted!
In article <jweeks-2610...@13-52.dynamic.visi.com>,
jwe...@visi.com (John A. Weeks III) wrote:
> If life is this hopeless, we all might just as well kill ourselves
> since we have nothing to live for.
Come now, there are many things much more meaningful than making
tons of money. There are lots of good things to live for! Family,
friends, and working to make the world a better place for everyone.
----------------------- Suicide is a terrible mistake. Anyone
contemplating suicide might want to consider that when they panic, that
they cloud their minds and loose their sense of what is and what is not
rational. Think you've got it bad? Think for 10 seconds about those who
die of hunger in this world of plenty, they're the ones that have it bad.
Also, consider the pain that such would cause others...the fact that
they've managed to survive other ordeals and they can get through this
too...and the fact that there are millions of good people who care about
them as individuals & humanity as a whole. The world needs to be rebuilt
so that it's a better place for everyone...a true democracracy...we need
all of the help that we can get and we're all brothers after all.
------------------------------------------------------------------- A
great teacher who has made a lot of predictions in the past 20 years,
all of which have come true...except for & maybe/probably until now, a
world-wide stock-market crash beginning in Japan. He has said that the
crash will lead to the creation of a new economic system that will be
good for everyone, not just a few. An economic system and society which
is truly 'by the people & for the people'. He says that the worst
problem that humanity has right now is the millions who die of hunger
each year, while tons of food rots in warehouses.
----------------------------------------------------------
Psalms 82 verse 6:
"I have said Ye are Gods, and all of you are children of the Most
High."
Note that it doesn't say 'some', rather *all* of us! So have no
fear, be still and know that things will get much, much better
after the smoke clears from this great crash.
<http://www.shareintl.org> More about the Teacher
Also...does it seem a strange coincidence that a collapse of the Hong
Kong stock market
should precipitate a global economic collapse on the very eve if
President Jiang Zemin's
state visit to the US. Did the Chinese think that a little trouble in
the world markets
would give Jiang some leverage in dealing with the Clinton
administration. Did they
miscalculate horribly or is this the beginning of the final phase of
their campaign for the
economic colonization of America?
Here are some levels of market indices that make this market still
overbought at todays prices :
Dj 5505 overvalued 130 % at todays closing price of 7161.15
S&P 667 overvalued 131 % at todays closing price of 876.99
DJ Transp. 2127
S&P Ind.Index 672
This market prices are calculated based on a stock market model.
All that is needed for a full bear market is a rise od intrest rates.
- patrick -
> This is no where close to the 87 crash % wise.Just Chill.There really is
> no weakness it is only the asian markets and bad "market virgins"
> nerves.
Bad nerves of 'market virgins'? Ah, yes, you must mean it's more like 1929!
Neil F
Jay Ingalls
==============
On Tue, 28 Oct 1997 00:27:25 -0500, DE BRUYN
Patrick <"DE BRUYN Patrick"> wrote:
+ John A. Weeks III wrote:
+ >
+ > If life is this hopeless, we all might just as well kill ourselves
+ > since we have nothing to live for.
+ >
+ > BTW, if you knew the first thing about how the stock exchange works,
+ > you would know that a 1987 style crash is no longer possible.
+ >
+ > -john-
+ >
+ I would not say that a 1987 style crash is no longer possible!
+
+ Here are some levels of market indices that make this market still
+ overbought at todays prices :
+
+ Dj 5505 overvalued 130 % at todays closing price of 7161.15
+ S&P 667 overvalued 131 % at todays closing price of 876.99
+ DJ Transp. 2127
+ S&P Ind.Index 672
+
+ This market prices are calculated based on a stock market model.
+
+ All that is needed for a full bear market is a rise od intrest rates.
+
+ - patrick -
>hila...@juno.com wrote:
>
>> Friday's market activities will more than likely result in a
>> major
>> market crash, which will make the crash of ten years ago
>> look like 'small potatoes'. If you're wise, you'll get out
>> while you can. It's hopeless. After you sell, It'd behoove you
>> to give some of the loot to charity. Hope you had fun while
>> it lasted!......
>>
>
>The market ain't crashin' on Monday. What, are you long OEX puts,
>you slopehead?!?
Ok, it isn't a crash you say? Just a $554 point "adjustment".
Sure.
Still think a reasonable value is cloae to $3000 for DJIA.
And intrest rates have to drop with a full 2 percent to stay in line
with the present economic situation.
However, if central banks decide to react to the falling US dollar and
think that the only way to secure future economic growth is to increase
intrest rates, than stock markets have a bleak future.
-patrick-
-patrick-
> J.M. (Jay) Ingalls wrote:
> > Did you notice that interest rates DROPPED today
> > Jay Ingalls
> > ==============
>
> And intrest rates have to drop with a full 2 percent to stay in line
> with the present economic situation.
>
> However, if central banks decide to react to the falling US dollar and
> think that the only way to secure future economic growth is to increase
> intrest rates, than stock markets have a bleak future.
>
> -patrick-
>
And where are you going to find room to drop interest rates 2%(!!!) in any
market??? In Japan that would put rates at ( minus ) -1.5% !!! If
speculators
take a hit on the market, that's no reason to hammer currency markets...
UNLESS you want to see real trouble!
The market has been going sideways for a while now. If the market bubble
doesn't keep expanding, then people will have to look at REAL returns.
That's
whats been happening for a while now.... ( get it ??? )
The stampede you think your seeing is merely the neophytes suddenly wiseing
up.
What's the ratio between price and yield these days... HHHMMMmmmm????
L8R
THE SKY IS FALLING... GET OUT WHILE YOU CAN!!!!! AHHHHHHHHHHHHHHHH!!!
for heavens sake. give it all to charity? If you sell off stocks that
you bought after careful consideration, based on an emotional nose dive,
then the charity you are giving your money to is the bear market.
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Check the S&P 500 (SPX) and Dow Jones (DJIA) using
MACD and Bollinger Bands going back 1 year.
The "crash" is 2 weeks late!!!!
Don't give me another opinion from some "talking head"
LET's TRY FACTS FOR A CHANGE
David Cooper 'ONE UP ON WADE COOK'
http://members.aol.com/Davidcoo/2.HTML
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Check the S&P 500 (SPX) and Dow Jones (DJIA) using
<BR>MACD and Bollinger Bands going back 1 year.
<BR>The "crash" is 2 weeks late!!!!
<P>Don't give me another opinion from some "talking head"
<BR><FONT SIZE=+2>LET's TRY FACTS FOR A CHANGE</FONT>
<BR><FONT SIZE=+1>David Cooper 'ONE UP ON WADE COOK'</FONT>
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Wow, a stock market model!!! Are you familiar with the expression "shit
in=shit out"
Harry Perini <hpe...@worldnet.att.net> wrote in article
<01bce31a$5384d3c0$a981...@327135829worldnet.att.net>...
> It is Moday 3.45pm. I listened to John A. Weeks & did not get ouit. Now
I
> am WIPED OUT!!
>
>
> John A. Weeks III <jwe...@visi.com> wrote in article
> <jweeks-2610...@13-52.dynamic.visi.com>...
>
> > BTW, if you knew the first thing about how the stock exchange works,
Richard
DE BRUYN Patrick wrote:
> I wouldn't say that the stock market has been going sideways.
> If you take in consideration that the Dow Jones Industrials had gone up
> 33 %
> over the last 12 months. Earnings for this same index had risen only
> 12.8 %
> over the same period. For the S&P500 you had 38 % and 16 % respectively.
> These figures explain the difference in your ratio between price and
> yield.
>
> And if you think that there is no reaction in currency markets, than
> take a
> look at the US dollar/DM value since last monday.
>
> I don't believe in any "stampede". What is happening is a reaction of
> the market
> to a certain overvaluation. Take a look at a chart of the Japanese
> stockmarket
> before its "stampede" a few years back, and compare this to the
> chartpattern of
> the US stock market for the last year.
>
> As to the drop of 2 % in intrest rates : the US didn't suffer from an
> economic
> slowdown from 1993 on, because it exported its recession to the rest of
> the
> world through the free fall of the US exchange rate.
>
> In the following months the world will feel the next economic slowdown.
> Either
> the US keeps his dollar high and suffers with the rest ( unlike 1993 to
> 1995 ),
> which can go along with a radical drop in intrest rates, or the US tries
> the
> same medecine as it did since 1993, but this time this will result in
> higher
> intrest rates, because foreigners ( the japanese own the largest part of
> the US
> debt ) will sell american assets ( and bills/bonds ) due to the falling
> US dollar.
>
> -patrick-
--
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* *
* Overdrawn? I still have checks left!!! *
* *
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Richard Liu
Verilink Corporation
145 Baytech Dr.
San Jose, CA 95134
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Richard Liu wrote:
>
> My understanding is that if the interest rate is high, the currency
> should be high too. Am I missing sth here?
>
> Richard
>
*******************************************************************
> * *
> * Overdrawn? I still have checks left!!! *
> * *
> *******************************************************************
>
> Richard Liu
> Verilink Corporation
> 145 Baytech Dr.
> San Jose, CA 95134
>
> (408)941-7447
> rich...@verilink.com
I included a graph below.
Especially in times of recession you cannot be more wrong.
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Since you've got all that nice data, maybe you could augment
the graph with:
1) Real U.S. interest rate (subtracting out inflation)
2) Nominal and real German interest rate
Then XY plot the relative real US/German interest rate
against the $/D-Mark ratio. I suspect the original
poster was closer to the truth than you admit.
Without correcting for inflation and variations in the
interest rates in the target currency, I'm not sure
there's really any conclusion you can draw.
JMHO.
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>cha...@ibm.net wrote:
> =
> Since you've got all that nice data, maybe you could augment
> the graph with:
> =
> 1) Real U.S. interest rate (subtracting out inflation)
> =
> 2) Nominal and real German interest rate
> =
> Then XY plot the relative real US/German interest rate
> against the $/D-Mark ratio. I suspect the original
> poster was closer to the truth than you admit.
> =
> Without correcting for inflation and variations in the
> interest rates in the target currency, I'm not sure
> there's really any conclusion you can draw.
> =
> JMHO.
I included a graph for the period 1986/96.
The red line is the inflation adjusted ( real ) US/german interest rate
ratio. The other line is the $/DM ratio.
The regression, statistics are as follows :
Regression Output: =
Constant 1.4721672
Std Err of Y Est 0.1319303
R Squared 0.2220776
No. of Observations 470
Degrees of Freedom 468
=
X Coefficient(s) 0.3497191 =
Std Err of Coef. 0.030256
Look at the R=FD of 0.2220776 ( as opposed to a number of above 0.90 if
the two series would have a strong correlation ).
The theories in textbooks is not always a guaranty for situtations in
the real world.
Patrick
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Actually, I found this very interesting, and thank you for it.
R Squared of .222 (r of about .47) is actually quite good,
especially given the DF. Of course, you're free to form
your own conclusions.
JMHO.