Zeev's Turnips Patch-No Politics (ZEEV)

[Zeev Hed]

Roach more or less reflects my thinking for the last few years. Short term, however, he seems to be indicating that policy drives to reflate the economy will not work, implying, almost a very close "encounter of the worst kind". He may be right, but I think that a good solid retrenchment in equity valuation could avert such an outcome at least until the middle of next year. As far as a resumption of a recessionary environment, I agree it will come, but not before late next year, maybe even a delay till early 2005. I think Roach underestimates the survival instinct of politicians and their willingness to "mortgage the future" for winning an immediate election. The market next year, might actually mimic the market during 2000, a strong opening followed by a tough spring relapse (but not as deep as in 2000) and then a revival into elections, or at least about two months before the elections.