Replies to post #50138 on Zeev's Turnips Patch-No Politics (ZEEV)

[Babylon]

Interesting thoughts, Mlsoft.

In what way, does buying up securities by the Fed open market operations, have a negative impact on the market -- ultimately? In other words, if they are able to monetize out of this, what's the downside risk(s) involved with the stock market in general; i.e. is it if/when they (the Fed) unload their inventory once they sense the average j6p is caught up into it (allowing for some artificial "traction" among the general public), hence reduced equity returns over time....or? I'm curious on the negative implications on this. Thanks ahead of time.

[jdaasoc]

no question that current valuations put us well into bubble territory

I agree on your assessment totally. I am slightly surprised on total lack of restraint on the bullish side as evidenced by the return of bubble style charts. How much longer can they reinflate ar 8-10% per month. Last one lasted for 6 months this one is on month 3.

I like three stocks ADTN, CCMP and SNDK which have reinflating to 9/99 pre bubble levels, 52 W highs, good earnings growth, small float which insures volitity and only way is them is up if FED easy money continues until it is killed by FED policy change.

Greed is as powerful of a drug as any other.

[JMKel]

Actually, the housing market is doing great with both new and exsiting home sales at quite high levels. This is likely to continue for as long as rates are as good as they are. In addition to the housing sale market is the refinancing market.
That also is likely to undergo a renewed volume of refinancings.
Connected to the housing market are the furnishing retailers, the home improvement market etc. So things are not so bleak...

The auto market is also doing well. Unfortunately, for some of the US auto makers the Japanese are doing better and taking share.

The wireless market is also strong.

Now the next argument is that all this is unsustainable...

I could go on. I don't see the funeral for the economy anytime soon. Thanks for helping provide liquidity to the market.

[TJ Parker]

well, mlsoft. first, i have to say, i read this board but almost never post. second, i think you're one of the sharpest on here. (*)

anyway, i would agree with you to some extent - but probably in a more limited way than you intend. to me it does look like a "grand conspiracy" right now to make the economy look stronger than it is ("grand" because it involves lots of players who tweak the numbers (e.g. jobless claims via unusually large seasonal adjustment), report them (without reference to the adjustments), spin them, and so forth. and, in line with what you're saying, thats probably all targeted towards the consumer during xmas shopping season.

but on a larger scale, i *do* have to believe that the powers that be are not so panicked that they'd take the kind of risk you're suggesting as their solution to the problem. the way i see it: the market made its sharp reversal this fall as corporate bond spreads were breaking historical extremes. the situation would become pretty bad for our major corporations they are locked out of both equity and debt markets. so i'd think the turnaround that's been engineered is more directed towards that, with only a secondary target (short term) being consumers and wealth effect. and its had this effect: bonds, convertible debt, secondary offerings, and so forth. however, i have to believe that greenspan would not look kindly on wallstreets bubblicous fervor that's piggy backed on top of this.

and there - it seems to me, anyway - its just games as usual.
putting aside the big caps, the little craps that have moved - that _could_ be seen as similar to last year at this time. around then, i was watching kopn, attempting to short. though the rally continued through january, kopn lost its momentum in mid december and came crashing down early, after doing a public offering. right now, i've been watching it again, together with stuff like pmcs. in the latter case, the price has been jammed back up to august levels, even though short interest had already fallen to 12 month lows last month. but - to my eyes at least - there have been signs of distribution there all this week. and then there are two of your favorites, cof and mbi, which really haven't moved out of the range they've been trading in over the last few months.



(*) also a great admirer of LG, who saved me a lot of money in spring 2000, and don sew ..