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Disintermediation Last updated on March 20, 1999


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There are a couple of big issues that could be debated and move the country forward in preparation for the coming crisis .

The overhang of benefits for the aged - In 1935 less 2.3 million were born and have reached 65 in 2000- in 1950 over four million were born and will reach 65 in 2015 - the current benefit is over $10,000 for Medicare and more for Social Security and going up with inflation and with more medical services the total will climb from the current about $ 400 billion ( $ 215 Medicare) to $ 1.2 trillion - 4.2 % of GNP up from 2 % for Medicare. ( Health care is 14 % of GNP )

http://www.lib.umich.edu/libhome/Documents.center/stats.html

The numbers go from 33 million beneficiaries to 60 million or 13 % to 27 %, ( children are 25 % of the population or 75 million ) , workers paying in decline from 130 million ( 45 % ) 5 workers to 1 retired to 120 or 2 to 1 worker to retired.

The cost will be 85 % of the current taxes / budget base and 20 % to 40 % of all earned income at 1.2 Trillion ( $ 1,200,000,000.00 ) or 10 % of the projected 12 trillion GDP rather quickly.

http://concordcoalition.org/


THE MISSING ISSUE IN THE CAMPAIGN"

Last month, the CBO released a study that tallies up federal spending on the elderly and children. It shows that, per capita, spending on the elderly towers seven-to-one over spending on kids, and that, overall, it consumes 35 percent of the budget. This is before the age wave even begins to roll in. By 2050, according to the White House, the major senior benefit programs will consume an incredible 84 percent of budget outlays.

It would be hard to deny that the rising cost of senior benefits is one of the biggest challenges facing national policymakers in the twenty-first century. How to control that cost ought to be a central issue in the presidential campaign. But the candidates are apparently more comfortable talking about intangibles like values and leadership than about fundamental resource trade-offs. And when they do raise concrete policy issues, from school standards to law enforcement, the issues are often ones over which, unlike senior benefits, the federal government can exercise little direct control."[ 25 % children and youth, 55 % labor pool ( 120 million working of 154 or 80 % working others in school, mothers at home and unemployed ) , 16 % elderly and the rest 5 % disabled or in jail etc. to 22 % children, 47 % labor pool, 27 % over 65 - ] Today’s school children could face a very good labor market if they get basic skill and are ready for the knowledge age.

The higher cost of labor should push technology as we become more capital intensive. Fewer workers creating a larger economy should mean higher wages if the system is not dragged down by benefits. Private saving increase investment and growth - government benefits decrease saving, work, and investment and therefore drag the economy down. Retirement could be shifted to private savings and investment by subsidies of 401 ( k ) and IRA for more and more people. For the poor 100 % support, declining twice as fast for each higher decile of median income - .i.e.. if you are at the 20 % level of all incomes you get a 60 % subsidy , 30% from the bottom gives is 40 % support level - of $100 in retirement ( or health benefits ) and the government gives you $ 40 toward your retirement.

The support ends at 50 % or the median income, half higher, half lower.

Then additional public benefits could be means tested and budgeted rather than an open check book system.

The Social Security and Medicare Trust fund could be transferred to the Federal Reserve - who would appoint trustees who would invest the funds like any other retirement fund such as the California States Employees fund. Current beneficiaries would be held harmless ( grandfather clause ) - and health benefits would be a fixed amount with choices such as the Federal Employees Health Plan with again a more support for the poor. Pay more get more is not a new idea, competition and benefit / cost analysis as in every other aspect of life. No free lunch. If health care is not paid for by the client ( but a third party ) and the doctor benefits from services - it will be too expensive.


The trade imbalance is related to investment in that we are importing foreign cash to balance our export of US dollars to buy foreign goods. Increased local savings will lower interest rates - by increasing the supply of money - and reduce the attraction of foreign investment.

This will force an orderly decline in the overpriced dollar - make imports more expensive and exports cheaper. I think Ross Parot could explain it with charts but Protection is not the answer.

The gender gap is because unmarried women ( I will fight for you ) need more outside support including government help and feel ( without fathers or husbands ) more insecure than married women and many men.

They have to feel that paying down the debt, setting social security on a really sound footing, providing medical care, education and other critical public services is safe for them. ( No risky schemes ) and have less concern with tax cuts and ideological motivations.


They have to take care of children, often the elderly or are elderly themselves - they know where the tire hits the road and don't want any fancy machine going too fast on unsafe tires. After the Democratic convention, Al Gore reasserted his lead over Republican George W. Bush among women, with a margin of 15 points or more in some polls, while making the race close among men.

http://news.excite.com/news/ap/000919/09/imf-europe A huge U.S. trade deficit could turn into a serious problem for the American economy if foreigners were to decide suddenly to dump dollar-denominated assets, which could push the U.S. currency down sharply and trigger steep declines in U.S. stock and bond markets http://news.excite.com/news/ap/000919/08/news-world-economy Referring to the various threats, the IMF said, "

The possibility that these imbalances may unwind in a disorderly fashion remains a risk to the global expansion." As for oil, the IMF said oil prices are about 20 percent higher than the IMF had assumed in its economic forecast, an increase of $5 a barrel. It estimated this should add $40 billion over a year's time to the oil import bills of industrial countries and cut their economic growth by 0.2 percentage points.

-

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FOR reporters: Please site "wiredbrain" reports that

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More power in a Palm Pilot than on the Apollo 10:



The accelerating rate of change forecast more change in the next century than in the last 10,000 years.

The increases in the rate of change between paradigms began at about 5000 years as ideas spread slowly - domestic animals, agriculture, metallurgy, then cities, bureaucracy and empires - then 500 years - printing, navigation, mathematics, deep mining up to the 18th century.

Then 100 years with potatoes, steam and steel, electric and chemical, communications and computers. Now in 25 years ideas are activated that used to take a century, then 12.5 years will have a century of 20th century progress, then 6.25 years what used to take a century and so forth.

The acceleration of the rate of change has been going on for a long time - it just gets faster and faster.



Therefore if Nano computer would have taken 50 years in the past it can be done in 12.5 years.

The speed of application of stem cells to build body parts, cloned cells used as normal therapies, use of immunization in treatments of ongoing virus infections and cancers, genetic engineered plants and animals as a normal accepted process, all being implemented at great speed. Even in a slow bulky industries such as cars - the fuel cell will move along more quickly than such technologies would have in the past. This really effects markets, marketing, and business planning in very fundamental ways.



http://www.bbc.co.uk/worldservice/business/index.shtml go to weekly then global business at the bottom of page


The Age of Spiritual Machines : When Computer Exceed Human Intelligence by Ray Kurzweil (Paperback - January 2000)


The Age of Spiritual Machines : When Computers Exceed Human Intelligence by Ray Kurzweil (Hardcover - January 1999)

Darwin Among the Machines :

The Evolution of Global Intelligence (Helix Books) by George B. Dyson (Paperback - October 1998)


http://www8.bcity.com/book_bargains/spiritual_machines.htm


For Example: Dialpad.com is the world's first free Java-based web-to-phone service. With

Dialpad.com, you can make unlimited free phone calls to anybody in the US as long as the other party has a valid phone number. Dialpad.com works just like your own telephone. You can make phone calls to any phone number in the US. Furthermore, you don't need to manually download and install any software. You can make any call while your are browsing the Internet and it is FREE!


weirdbrain ' (wîrd) adj., weird·er, weird·est. Of, relating to, or suggestive of the preternatural or supernatural. Of a strikingly odd or unusual character; strange. Archaic. Of or relating to fate or the Fates. n.

Fate; destiny. One's assigned lot or fortune, especially when evil. Often Weird. Greek Mythology. Roman Mythology. One of the Fates. weird'ly adv. weird'ness n. SYNONYMS: weird, eerie, uncanny, unearthly.

These adjectives refer to what is of a mysteriously strange, usually frightening nature. Weird may suggest the operation of supernatural influences, but it may also be applied to what is merely odd or unusual: “

The person of the house gave a weird little laugh” (Charles Dickens). “

There is a weird power in a spoken word” (Joseph Conrad). Something eerie inspires inexplicable fear or uneasiness that seems to result from a sinister influence: “At nightfall on the marshes, the thing was eerie and fantastic to behold” (Robert Louis Stevenson). Uncanny refers to what is unnatural and peculiarly unsettling: “

The queer stumps . . . had uncanny shapes, as of monstrous creatures, whose eyes seemed to peer out at you” (John Galsworthy). Something unearthly seems so strange and unnatural as to come from or belong to another world: “He could hear the unearthly scream of some curlew piercing the din” (Henry Kingsley).


http://www.compaq.com/rcfoc/index.html Does the term "Network Computer" sound familiar...?

* Another Broadband Alternative -- More acronyms: LMDS and MMDS.

These are technologies for deploying high speed Internet access using broadcast radio waves -- think of it as wireless cable or wireless DSL. A few areas, such as New York City and Silicon Valley, already have some limited implementations. But according to the Oct. 26 New York Times (http://www.nytimes.com/library/tech/yr/mo/biztech/

http://www.nytimes.com/library/tech/yr/mo/biztech/

articles/26internet-wireless.html), a new big-name consortium led by Cisco plans to give cable and DSL companies a run for their broadband money -- and they point out that their terrestrial radio-based MMDS (Multichannel Multipoint Distribution Service) solution doesn't require digging up any streets or placing equipment in the difficult-to-enter telephone company offices. (A tutorial on MMDS and related technologies is at http://www.webproforum.com/wire_broad/topic10.html

http://www.webproforum.com/wire_broad/topic10.html ).

Warning: DOWN 19.5 at 1066 the short term is well into over bought

conditions

( sell: go short )


OIL INDEX -


Markets

TODAY

TRADE :


CURRENT UPDATES on FLASH.HTM


News and analysis GO TO Money pages first

long.htm, then

conditions.htm, then

money.htm and last

flash.htm

TUESDAY:


GEN MAGIC INC. (Nasdaq:GMGC) no options at 4 7/8

Average Convergence/Divergence (MACD) indicates a BULLISH TREND Chart pattern indicates a STRONG UPWARD TREND Relative Strength is BULLISH Up/Down volume pattern indicates that the stock is under ACCUMULATION

The 50 day MOVING AVERAGE is rising which is BULLISH

The 200 day MOVING AVERAGE is rising which is BULLISH LOOK FOR SUPPORT AT 4.30

RECOMMENDATION ( stockwatch)

Click here for the emerging history

of the 21st century. Internet.com
Key word "infrastructure"

http://www.wiredbrain.net/information.htm

All Boiled down on CONVERGENCE AOL: the super market of the world


What does AOL Time Warner ( and Wal-Mart, & some Computer terminal company and cable modem or broadband connection ) mean for the future of global society ? What is the image they pursue ?

http://www.wiredbrain.net/image.htm

CONVERGENCE: Interactive television, combining audio telephone, video conference and cable or satellite TV, video on demand, all designed to advertise and sell on the spot all kinds of good and services.

What is called "entertainment" on television is different from plays, or movies or theme parks or games or sports because the role of "content" is only to attract an audience so they can be sold something.

The job of television is sales - not news or information or entertainment which are only provided so people watch and can be sold something.

The role of AOL / Time Warner will be not only to sell others goods but direct sales.

Their dream is the click and buy advantages of two way communications.

In the process cable or other broadband can replace a good share of long distance voice, video rentals, VPN virtual private networks, if and only if, the broadband connections really works then personal computers become network devices or

http://www.wiredbrain.net/NEXUM.htm a multipurpose communications and entertainment console.

AOL Time Warner believe that whatever the method for the broadband connections they will control the content.

The contact rates - for cable, telephone, Internet and video on demand provide cash flows that support the capital for improved networks and on-line sales provide the profits.

It's not only that you can buy your tooth paste from the commercial ( click here to add it to your Wal-mart order ) but you might get free samples for filling out forms. You can add with a click to your grocery list. People really will buy travel deals, change banks or brokers, buy records after getting MP3 samples, select household gadgets, buy gifts, use auctions, even pick appliances and cars.

They will seek better mortgage and insurance rates, look for a new house, and a thousand other products and services.


http://www.wiredbrain.net/disintermedation.htm

Disintermediation means becoming the middle person between the buyer and seller. On-line systems such as Amazon.com means direct sales take on a whole new meaning. I would look for a Amazon Wal-mart connection if not merger.

AOL can do what Sears did.

The Sears brands were produced by OEM ( original equipment manufactures ) with Sears keeping a very tight control of quality and margins. Many of their providers became dependents. B2B means the intermediary can arrange shipments from the provider to the buyer and become the super market of the world.

StarOffice 5 is a free download from Sun microsystems at


http://www.sun.com/

65 MB without recover ( not easy the CD is $10 plus shipping

http://www.sun.com/products/staroffice/get.html

StarOffice has a fully integrated set of powerful applications that provides Microsoft Office compatible word processing, spreadsheet, graphic design, presentations, HTML editor, mail/news reader, scheduler, and database functions. With the release of the new 5.1 version for worldwide distribution, StarOffice provides significant performance and feature upgrades that improve user experience and productivity.

StarOffice 5.1 includes:

  • StarOffice Writer for document editing,
  • StarOffice Calc for creating spreadsheets,
  • StarOffice Impress for creating presentations,
  • StarOffice Draw and StarImage for creating vector and bit-mapped graphics,
  • StarOffice Schedule for managing calendars and to-do lists,
  • StarOffice Mail for handling e-mail,
  • StarOffice Base for creating interfaces to databases,
  • StarOffice Discussion for reading Internet news, and
  • StarOffice Math for creating complex formulas,
  • StarOffice Workplace for creating a desktop environment

http://www.sun.com/smi/Press/sunflash/9908/sunflash.990831.2.html


http://www.sun.com/dot-com/staroffice.html

It's really good !


The integration of text, http editor, spreadsheets, presentations, drawing, mail, frames, work folders, database, global documents, diagrams, images, formula, is really MUCH better than Office and word.

And it's free



Britain's Keele University, and from Cavendish Management Resources (CMR), of a "3-D Memory System" that promises 3.4 terabytes in a device the size of a credit card it costing about $48!!

Fast transportable records means a whole new world of record keeping and economic transactions. Indeed the time has come for

Global Money as well as communications.


The concept of a virtual organization - of a transitory network of individuals coupled together by advanced communications technologies - continues to grow in prominence. However, a lack of detailed, real-world cases poses a significant problem when attempting to analyze the business potential of linking remote workers in patterns of

virtual organization. Such a lack of examples is particularly acute within the small business sector. A case study of a UK-based SME - Cavendish Management Resources - is presented. Both practical and theoretical insights into new flexible

patterns of organization in the small business sector are presented.FROM

http://www.digital.com/rcfoc/



STOCK IS A BUY

That's why I was intrigued to read that General Magic has just acquired NetPhonic Communications, the maker of Web-On-Call, which is basically a "voice browser" giving you voice synthesized information from any Web site through a touch-tone telephone (a demo is available at

http://www.netphonic.com). General Magic intends to incorporate this voice browser into its fourthcoming Serengeti product, due out this year, which promises to integrate voice mail, Email, faxes, address books, and calendars through a natural language voice user interface

http://www.genmagic.com/html/98releases/prrel980310.html).


Technology Advancement of the Year

`Perhaps one of the most unusual and innovative palmtops available is the REX. This diminutive device is the size of a PC card and for good reason -- the organizer is designed to actually fit into the PC card slot on a PC or laptop computer.''

Starrfish conceived, designed and developed REX.

The core technology building blocks used to develop REX are part of the Starrfish TrueSync Technology Platform (see related release from August 7, 1997). Starrting in 1994, Starrfish developed the TrueSync Technology Platform to provide a technology foundation capable of delivering leading-edge products and services in a rapidly changing Connected Information Device market. Connected Information Devices include pagers, cellular phones, PC Companions, palmtop PCs and other devices that are capable of seamlessly synchronizing information with desktop computers and specialized servers. Starrfish works closely with leading device manufacturers and cellular, paging and telecommunications operators to develop complete, customized solutions built on the Starrfish TrueSync Technology Platform. Motorola (NYSE: MOT - news), Hewlett-Packard (NYSE: HWP - news), General Magic (NASDAQ:GMGC - news) and Franklin Electronic Publishers (NYSE: FEP - news) are among Starrfish's partners. Founded in 1994, Starrfish is privately held with headquarters in Scotts Valley, California. More information can be found at www.starfish.com.

April 85 PUT

MSQPQ

MONDAY:


Motorola MOT at 55.4 MOTDK Apr 55 Call at 1 1/2

FRIDAY:

EUQDI - APR 18, 1998 $ 45.000 CALL - C I E N A CORP
Price: 2 3/4 Bid: 2 1/2 Ask: 2 9/16 5 EUQ APR45 Call NOW at 5 up 100 %


PUT DJX April 86 Put DJXPH


The Year of the Tiger begins: Trees do not grow to the sky but do grow rather high. Strategists felt that current market levels were fragile and a single piece of bearish news (INTC) could break the record setting run.


The general quality of market news, comments and reports are really very silly non-sense and babble - after therefore because - the chicken crows and the sun rises.

They also tend only to look out the window and only talk and listen to people in the same room or village. Let's guess what "they" will say today. Stocks fall on profit taking. Stock rise on take over news, buying of blue chips - or fall because of ... Concerns about ( fill in the blank ) the "fed or interest rates", "Asia", "Earning" "X forecast or broker's down grade" hurt technologies today, the attention spans of a fruit fly.

The only truth is more people were buyers or more people were sellers and no one knows what was going on in their collective minds. Over the long term ( a week ) fundamentals will cause a drift in the direction of reason, either as a sudden break or a slow trend.

We can do a much better job. If we really

understand something we will know how it will behave ( within limits ). Wiredbrain gives the news before it happens - we are like the weather forecasts based on what is happening elsewhere before it happens here. -

The global economy allows us to

forecast major events in the US markets. We follow the market and just take what it gives us - while futures reflect the actual situation many, less traded, options are only based on volatility rather than current conditions. We try to be later rather than too soon - miss rather than get sucked in - safe rather than sorry. It's a risky business and safe trades don't come along very often.

Last week MSFT or INTC puts did very well !


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MARKET MOVING NEWS:


Theme of the WEEK:

Friday March 13, 5:43 am Eastern Time

08:32 INVENTORIES UNCHANGED IN JAN.
08:31 PPI YR TO DATE FALLING AT 4.5% ANNUAL RATE.
08:31 PPI YR-ON-YR DOWN 1.6% IN FEB.
08:31 CIGARETTE PRICES RISE 2.1%, HIGHEST SINCE SEPT. 97.
08:31 CRUDE GOODS FALL 2.5% IN FEB.
08:30 WHOLESALE INTERMEDIATE GOODS PRICES DOWN 0.2%.
08:30 FOOD PRICES UP 0.4% IN FEB.
08:30 WHOLESALE ENERGY PRICES FELL 1.8% IN FEB.
08:30 FEB. CORE PPI UP 0.1%, MORE THAN EXPECTED.
08:30 FEB. PPI DOWN 0.1%, LESS THAN EXPECTED.
08:06 30-YEAR TREASURY DOWN 1/32; YIELD AT 5.869%.
08:06 TODAY'S US DATA: PPI, INVENTORIES.
07:33 PARIS CAC TRADING UP 50.62 OR 1.4% AT RECORD 3577.19.

07:32 GERMAN DAX TRADING UP 57.38 OR 1.2% AT RECORD 4896.98.

07:31 HONG KONG'S HANG SENG RISE 154.56 OR 1.4% AT 11057.03.

07:30 NIKKEI GAINS 484.92 OR 2.9% AT 17060.14. <


PPI in Charts


Daily commentary updated for March 12, 1998

Deflation is here, at least as far as PPI is concerned.

The Producer Price Index measures the change in prices for inputs to producers of consumer goods. This includes many commodities and intermediate goods. In 1997, the PPI fell 1.2%, and it has been falling in 1998 as well.

"People are amazed by the market's resilience," said one trader. "

The market is still able to take quite negative news in its stride," he added.

Sun Microsystems Inc <SUNW.O> was bid at $43-1/4 from a close of $42-7/16 after a Wall Street Journal report that Microsoft Corp <MSFT.O> was introducing tools that encourage programmers to use Sun's Java language to write software that runs only on Windows.

Chaos looms if IMF/Indonesia tiff ends in divorce

By Phil Smith

JAKARTA, March 10 (Reuters) -

The stand-off between the Indonesian government and the IMF over economic reforms is getting more tense by the day, with both sides digging their heels in hard about their differing perceptions of the economic and
political issues.


The immediate impact of such a move would be to halt all further international aid and debt negotiations and since Indonesia is close to bankrupt a general debt moratorium would have to be declared.

As it is, the 90-day temporary payment halt on corporate debt expires at the end of April and there has been a worrying lack of news on how the debt rescheduling talks are going. At the moment the market is expecting the worst.


The third major impact would be a likely collapse of the banking sector, although analysts pointed out that many of the 200-odd banks left in Indonesia were in a pretty perilous situation and appeared to be going under anyway.

Indonesia has guaranteed the deposits and liabilities of 16 failed banks that have been closed but with reserves already
dwindling, cash to help maintain this guarantee is urgently needed.

Indonesia's foreign assets now stand at $16.3 billion but have been falling on a consistent basis from $19.0 billion in January and $21.4 in December. Analysts suspect cash is being diverted to prop up the banking sector and say that only around $10 billion or less of these reserves are in a usable form.

This would lead to the other main impact if the funding were withdrawn. If Indonesia was free from the shackles of the IMF programme and there was downward pressure on the currency, Suharto would almost certainly implement a currency board or other fixed exchange rate system.

``I think he would go straight for a currency board if for some reason the IMF funds were not fourthcoming,'' said one in Singapore-based analyst at a major British bank who asked not to be named.

``If the IMF funding is cut off Suharto hasn't got much to lose and would fix the rupiah.''


The huge danger with a currency board is that businesses and individuals would scramble to get their cash off-shore at a better rate and the whole fixed currency system could well collapse if the fiscal flood-gates opened.


The fourth big impact of the need for ready cash would come from Bank Indonesia, which would likely tweak up the speed control on the rupiah printing presses a notch or two.

Many analysts reckon Indonesia is heading for sky-high inflation anyway, but the absence of overseas aid would simply speed the process as more cash sloshed into the system.


There have already been riots over rising food prices in which five people have died.

Without IMF help Indonesia will have to seriously start looking for funding from elsewhere, but it is extremely hard to see where the money would come from.

As analysts pointed out, if central banks are lenders of last resort within their own countries, the IMF is lender of last resort to central banks.

Monday: March 9th

---------------------------------------------------------------


The dollar gained in Asia overnight on talk of a confrontation between the International Monetary Fund (IMF) and Indonesia over the pace of government reforms.

But both sides now appear to be trying to mend fences and the IMF said it hoped to conclude talks soon on the disbursement of part of its $40 billion bailout package for Indonesia.


The main concern for equity markets was the Compaq announcement, which made the third gloomy warning from a U.S. information technology firm in as many days.

HK stocks open sharply lower on Asian jitters

HONG KONG, March 9 (Reuters) - Hong Kong stocks opened lower on Monday on concerns about weak regional
currencies and developments in Indonesia, sending the Hang Seng Index down 165 points, or 1.52 percent, to 10,754 in early trade.


The fall of the rupiah dampened sentiment but selling pressure was not great in early trade, Ricky Tam, senior research analyst Delta Asia Securities. ``

The Hongkong Bank (HSBC) going ex-dividend also dragged the Hang Seng lower.''


The Indonesian rupiah fell to 11,700/12,200 per dollar on Monday morning from 10,100/10,600 in late Asian trade on Friday as tension between the goverment and the International Monetary Fund intensified.

Indonesian President Suharto said over the weekend that reforms tied to the IMF's US$40 billion resuce package were not suitable for the Indonesian economy.

James Osborn, sales director at ING Barings, said the market ignored the 125-point gain on Wall Street on Friday, and the poor pre-sale of flats at the weekend drew some selling.

``I think people are probably getting bored of Indonesia in terms of this day-to-day shenanigans that goes on,'' he said, adding the Hang Seng should see a short-term supporting level at 10,700 points.


The real headline grabber, however, was Intel. Its heads up announcement shook investors because it came from a high profile company, which has been viewed as a gauge of the health of Corporate America.


The news was also troubling for investors who have priced stocks to expect near perfect earnings.

Chuck Hill, First Call's director of research, a Boston-based firm that tracks analysts' earnings predictions, said Wall Streeters are quickly lowering their expectations.


They see a growth rate for the earnings of the Standard & Poor's 500 companies of just 3.7 percent in the first quarter, a steep drop from expectations for an increase of 11.4 percent in January. In the 1997 first quarter, profits jumped 15.1 percent.

"Wow, is the correct word for it," Hill said. "This is unusual because the cut is deeper and is coming sooner than normal."

Now, the experts are wondering if perhaps they had been wrong in dismissing the impact of the Asian crisis, which has pretty much killed off the once wealthy Pacific Rim region as a source of revenues for U.S. multinational companies.

A downturn in profits could also signal that the companies are exhausting their productivity gains, having used up the magic tricks -- sweeping restructurings and job cuts -- that made their earnings look good over the last couple years.

U.S. fund downbeat on economy-Merrill Lynch survey

LONDON, March 9 (Reuters) - U.S. fund managers are downbeat on their economy, according to the Merrill Lynch Gallup Global survey for March released on Monday.

Only 14 percent of respondents to the poll forecast an upturn in activity over the coming year and two-thirds of managers forecast the Fed's next move would be a rate cut.

``

The overwhelming consensus of money managers expects a slower U.S. economy and lower interest rates,'' said Trevor Greetham, Merrill Lynch global strategist.

Meanwhile investors are moving back into Treasuries where buyers outnumbered sellers in March by 14 percent, with most of these purchases probably being funded from cash.

U.S. fund managers planning to cut cash balances outnumbered those raising cash by 25 percent compared to five percent last month.


Their preference among U.S. equities swung towards large caps which were favoured by 63 percent of respondents compared with 48 percent in February.

Latin America strengthened as the favoured emerging market with 48 percent of respondents naming it their first choice versus 41 percent the previous month.

Interest in Asian equities slumped in March with bulls outnumbering bears by 19 percent compared with the previous month when there were 40 percent more bulls around than bears.

Japanese stocks were also out of favour with bears outweighing bulls by eight percent.

Consequently buying of Asian equities fell sharply with buyers of Pacific equities outnumbering sellers by 19 percent down from 30 percent the previous month.

Buyers of Japanese stocks outnumbered sellers by only six percent against 18 percent in February.

Greetham said the dim view of Japan probably came from disappointment that last month's fiscal package to stimulate the economy had not been as large as investors had hoped.




Action in the Futures Market

News Overview:
AHEAD TODAY:

` Market drops as RALLY Pauses :


Quicken

---- .


Marketwatch from Money


Technologies NEWS & INDEX

Wiredbrain will trade your account for 50 % of net return. You set up an options account ( any on line discount broker, we use E-trade, Quickway, Datex or Suretrade are all OK ) and for at least $2500.00, options level 2 or 3 account, and we will trade it for you ( after we have done our own ) with the expectation of 100 % return a week of funds at risk. ( some weeks there are no good trades) You send us 50 % of the profit and we will continue to do trades for you at the moments it right to do so, since you don't have time to watch the market the way we do.

<BR><B><h4> The author


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AND FREE HELP and education:

http://www.cboe.com/intro/whatis.html is a good place to start.

The CBOE booklet is very useful and free.

There is TOO much to learn all at one time - so you need a step by step method - Etrade has some educational materials - You will have to request the options trading form and you could enter my name as a authorized trader. All we are doing is index trades - if the market is going down we buy puts ( NYX and OEX has the volume and P/e ratio that works best at the moment ) look at

http://cboe.pcquote.com/cgi-bin/cboeopt.exe?TICKER=ndx&ALL=1 NDX JAN 980 PUT at 10 1/2 is $1050.00 for one -up $300.00 from 7 in the last few minutes, each point is $100.

http://cboe.pcquote.com/cgi-bin/cboeopt.exe?ticker=OEX the OEX is at 454 the PUT just under the cash price is the Jan 450 .OEXMJ at 6 3/8 ( $637.50 ) up $112.5 NOW 19 1/ 8 + 11 1/ 8 $1912.50 300 % gain in two good days

TODAY

TRADE :

MONDAY March 9 Th

CURRENT UPDATES on FLASH.HTM

CALL: 39 7/8 Mar and Apr call

CITRIX

XSQPH
ACTION # DATE ORDER CTRCT OPTION YOUR ORDER BID ASK ORD#
3/07/98 Day Buy/C 10 XSQ MAR40 Call 2 2 1/16 2 7/16
3/07/98 Day Buy/C 10 XSQ APR40 Call 3 1/2 3 3/4 4 1/8
ORACLE:
3/08/98 Day Buy/C 1 ORQ APR25 Call 2 3/4 2 7/8

PUT:


Nasdaq Short Positions

Dell after split -

DJXPG ( DJIA Apr 85 ) @ 2
DJXOG ( DJIA Mar 85 ) @ 3/4
MSQPJ April;82 MSFT MicroSoft

INQPO April 75INTC Intel

Citrix Expands Client Platform Choices With New UNIX and Macintosh ICA Clients

FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--March 5, 1998-- Citrix Systems, Inc. (Nasdaq:CTXS - news) today announced the availability of new Clients based on its Independent Computing Architecture (ICA) technology, the emerging industry standard for thin-client/server computing. Citrix's new ICA Clients for UNIX workstations and Macintosh computers, when used in conjunction with Citrix WinFrame(R) thin-client/server software, extends the reach of Windows-based applications to a broader range of client devices within heterogeneous computing environments.

Rest at:

http://biz.yahoo.com/bw/980305/citrix_sys_1.html

Citrix does Windows on Unix, Mac By Stephanie Miles Staff Writer,

CNET NEWS.COM March 5, 1998, 6:00 p.m. PT

Citrix Systems today announced that Unix workstation and Apple Macintosh users will now have access to Microsoft Windows programs through Citrix's server software.

Citrix technology provides access to Windows software applications running off a server computer, allowing for a more centralized computing environment. Ordinarily, software is run on the user's "local" personal computer, not on the server.

A network solution like Citrix's is appealing to corporations, analysts say, because it offers the cost benefits of a server-centric "thin-client" or network computer environment while also maintaining the popular Windows interface.

Thursday:


MSQPQ Microsoft MSFT April 85 PUT

MSQPQ at 3 3/4 up to 6 1/2 ( closed out )
INTC Apr. 85 PUT

INQPQ 3 1/2 up to 11 ( closed out )
Wednesday March 4, 1:42 pm Eastern Time

RESEARCH ALERT - Morgan wary on Microsoft price

http://quote.yahoo.com/q?s=MSFT&d=1d
NEW YORK, March 4 (Reuters) - Morgan Stanley analyst Mary Meeker said on Wednesday the rise in Microsoft Corp's (MSFT - news) share price, especially given its position regarding the U.S. Department of Justice, made her hesitant to add to core positions at these levels.

-- ``This is a market event/psychology/valuation call and not a fundamental/positioning call -- net, near-term, we are nervous and we would suggest trimming back, not eliminating, some core Microsoft holdings,'' she said in a research note.

-- Microsoft was off 2 at 82-1/2 on more than 10.6 million shares traded by early afternoon.

-- Meeker said she remained positive about Microsoft's market position and fundamental business outlook, but said the stock was up 31 percent so far this year, compared to an eight percent rise in the Standard & Poor's 500 index.

-- U.S. Senate Judiciary Committee held a fact-finding hearing on Tuesday to probe whether Microsoft has illegally used or leveraged the dominant market share of its Windows operating system to stifle competition, particularly in the Internet software and content markets.

-- ``We continue to believe that government activities will remain a major ongoing issue for Microsoft...'' she said.

-- Any impact on Microsoft would not likely be significant from a financial perspective but Meeker is becoming increasingly convinced that Microsoft will be forced to make business practice concessions related to government efforts.

-- Said concessions likely to be minor, however.

-- ``It's our impression that (assistant attorney general) Joel Klein's Department of Justice team is working hard to file a
full-blown Sherman antitrust case against Microsoft within the next several months, and we believe there's a 50/50 chance that the Department of Justice will seek to enjoin launch of Windows 1998,'' she said.

-- Does not think delay in Windows 1998 would have material impact on Microsoft's revenues, and would not expect to
change estimates if forced shipment delay occurs, she said.

INTC Apr. 85 PUT

INQPQ 3 1/2 up to 11 ( closed out )

Intel's stock fell $10.44 on the after-hours market, trading at $76 a share, down from its closing price of $86.44 on Nasdaq.

The stock had been halted pending the release of Intel's statement.


The Wiredbrain


Theory of market motion :

conditions


CURRENT UPDATES on FLASH.HTM


There are external and internal factors.

The external factors are based on the existence of one global market, working 24 hours a day - going from New York to Asia to Europe and back. This market then influences the open because of actions already taken elsewhere.

Factor one includes

foreign markets. Factor two is made up of currencies flow into and out of the dollar. A higher dollar means more people are buying than selling which implies movement into U.S. markets.


The third and fourth factors are

INTERNAL. At any moment dozens of different factors come into play, up grades and down grades, earning, changes in leadership, news events, which are different from each other and change all the time. However, the American and global economy is driven by new technologies in communications and computers.

The model companies are Intel and Microsoft, rather than G.M. and Dupont on the older DJIA which as been below the market as measured by the SP 500.

Therefore the NDX is more representative of future growth than the Dow Industrial. Technology has been below the market -


Three months chart: Dec. Jan. Feb. For 6 months there was a nice pattern - NOW WHAT ? First INTC goes then followed by NDX then MSFT then the market - all in a nice order down to the middle of Jan. - MSFT starts up, then INTC then NDX then the market - so INTC should start down, then MSFT, then NDX then the market - over the next week or so..

Since Oct. Intel and the semi-conductors have been relatively weaker than the market as a whole until in the middle of Jan they turned stronger than market. This has pushed up the NDX as a whole. Microsoft has charged ahead of the market pulling some more technologies up. You can notice that Intel ( SOX index ) advances and drops first, then the NDX then the market. Now the market seems to be drag up by the tech stocks up. As the auto's drove the market in the 1950's and 1960's, and IBM, GE and medical services were the bell weathers in the 70's and early 80's, these new technologies now forecast the market as a whole. Since the middle of Jan. what do you see ? A shoot up in Microsoft then Intel and gain of relative strength of Technologies NDX ?


The final factor is built around Interest rates which effect the markets when they move out of range or quickly.

The market does not have very good peripheral vision and only takes account of rapid motions on the edge of its focus.

The futures CME flash reports, reflects all these factors and confirm Wiredbrain analysis.

When there is agreement - everything moving in the same direction the Instant Index goes up or down - gets bigger or smaller.

The market is a human activity and as all human activities is a mixture of objective reason and magic.

The world as we know is a perception, objective reality is only a special case observed by special methods. Events maybe perceived as important or not depending on the message and the media and preset patterns of expectations and prejudices.

These all too human factors, reflective factors, add temporary uncertainty and volatility.


The S&P 500 and Wiredbrain's Index as a SHORT TERM TIMER:


WIREDBRAIN'S PORTFOLIO

NOTE A grain of salt:

0 = 50 % ( 50/50 ) 3.5 = 55 % 5.5 = 65 % 6.5 = 70 % 7.5 = 75 % 10 = 80 % 15 = 90 % 15 + = 95 %

The higher the WI score the higher the probability of being right.

The wiredbrain index (WI) score is close to points on the S&P500 but are not points but the summation vector on the strength of different market forces.

+- 15 on the Wiredbrain Index = 90 % right or better, +-10 = 80 % or better, +-6.5 is over 70 %, under 4 is just a little more than 55/45

When the Wiredbrain's Index is greater than +- 6.5,

The predicted Open ( at 9 AM) is about 90 % correct on direction, 75 % correct on scale -

If the index is above 6.5 the predicted close is about 70 % correct in direction so positions maybe left open, above 10 the prediction is better ( 80 % ) but not as good as at the open.

Longer term direction depends on very strong trends: when Wiredbrain's Index is over +- 10 the move lasts for several days and real profits can be earned. Doesn't happen often that all the forces are lined up in the same direction; foreign markets, bonds, currencies, technologies and technical charts.

If you get all the way to the end of the page - you will be up to date on what's going on in the market. It is cut and paste so is current but a little messy.

The system is geological, the newer stuff is on top, older down a couple of layers.



WAKEUP CALL

TODAY


TRADE :
Index Call ( close at 975 on S&P) start @ 955 target 1050 or close enough -
Index PUT ( close at 1020 on S&P) start @ 1040 target at 955 then 930 or close enough

TODAY

TRADE :

MONDAY March 9 Th

CALL: 39 7/8 Mar and Apr call

CITRIX

XSQPH
ACTION # DATE ORDER CTRCT OPTION YOUR ORDER BID ASK ORD#
3/07/98 Day Buy/C 10 XSQ MAR40 Call 2 2 1/16 2 7/16
3/07/98 Day Buy/C 10 XSQ APR40 Call 3 1/2 3 3/4 4 1/8

PUT:

DJXPG ( DJIA Apr 85 ) @ 2
DJXOG ( DJIA Mar 85 ) @ 3/4

SAN FRANCISCO (Reuters) - Semiconductor giant Intel Corp. stunned Wall Street Wednesday with a warning that its first quarter results would be below expectations due to weaker-than-anticipated demand from personal computer makers.

"Weaker than anticipated demand ... is expected to cause revenue and net income levels to fall below Intel's expectations for the first quarter of 1998," the Santa Clara-based company said in a statement.


The announcement sent technology stocks tumbling in after-hours trading as investors scampered to shed some tech holdings.

Intel's stock fell $10.44 on the after-hours market, trading at $76 a share, down from its closing price of $86.44 on Nasdaq.

The stock had been halted pending the release of Intel's statement.

Wiredbrain 21st century stocks Portfolio Index: Set 3/10 at 100 current 101.2


WIREDBRAIN'S PORTFOLIO


Intel at 75 1/2 down from 94 high,

Microsoft 84 down at 79 1/2 -2.5 [split = 170 high]-
NASDAQ-100 INDEX (NDX )
1200
Sell June ( covered ) Call around the strike price Selling calls gives you the advantage to earning premium earning beyond the gain from lower NDX prices - once the position is taken put on a stop loss and a limit to buy back at some target price from 1175 the low target is about 1000 and should be a nice gain on selling at 100 and buy back at 30 or so ..

NCZCP, NDVFR,

NCZFT at a offer price that would have to be figured - as some of the prices are odd - odd high is OK but odd low is not.

CBS headlines Data Broadcasting Corporation.


OTHER RESOURCES

altavista search

See

Backup at http://www.wiredbrain.net/money.htm for what we thought a few minutes ago:


Most U.S. Indexes


CME


COMM RES BUR NDX (NYSE:^CRB) - Jan 30 · 234.39 Change -0.59 (-0.25%)


SOX SOX Semiconductor Index


NDX


MORGAN STANLEY HI TECH 35 ($MSH)


ALL U.S. Indexes





DJ COMMODITY 131.38 UP to 144 from 167.2 high Commodity prices going up in the last month from long term down - at 3 months high -


^DJC


the news in one place


Resources for Economists on the Internet


ECONOMIC RESEARCH


DJX Index

Forbes

The Big Issues


The Digital Revolution: Why and Whither


Resistance: At about S&P500 at 1100 8888 on the Dow people hit target prices on individual stocks and index futures and begin to close positions.

The futures market is different from the stock market itself. Different people with different ideas. When the market gets "too high" they sell futures ( short) with the idea of buying them back at a lower price. Sell high buy back low.

The future drops more below the fair market value. Sell programs then buy the futures and sell the stocks. Buy low futures sell stocks high. This may trigger more sell programs as people sell stocks and futures, going short and buying puts.

The drop in the futures price sets off more sell programs etc.

NEW YORK, Feb. 27 (Reuters) -

The New York Stock Exchange said program trading averaged 101.8 million shares a day, or 17 percent of its average daily volume of 598.9 million shares for the week of February 17-20.
Of the 101.8 million shares daily, buy programs accounted for about 52.2 million shares of the daily average volume, while sell
programs accounted for about 49.6 million.

There are just a few minutes when the Tail

wags the dog:


ALL INDEX


DJ COMMODITY NDX 131.38 UP to 144 from 167.2 high Commodity prices going up in the last three weeks from long term down - at 3 months high -


^DJC


DO IT YOURSELF FORM

Too late for the long side: but wait for high -

close out LONG UP positions on the rally take

short side: ... about 1050 on the S&P500 Target at 955 -

The big MO

charts

NetProphet from NEURAL
When at top ( or bottom ) and Wiredbrain Index instant Summary is greater than -6.5 go short (puts) when it is over + 6.5 then close shorts go long ( calls ) - in the mean while keep track of these options to see how you have done.

Bloomberg backup International markets:

Yahoo International not working this morning go to

my.yahoo.com sign in as "wiredbrain" password "synergy" and open major markets - see the individual stock picks for the next century.


BRIDGE International markets




Action in the Futures Market

News Overview:



The FTSE 100 index sprinted into record territory and over the 5,500 level for the first time.

`` People don't know quite what to do,'' said the head of trading at one large brokerage, stunned at the size of the rise. `` It's a very brave person who chases the market at this level.'''


News and analysis GO TO Money pages first

long.htm, then

conditions.htm, then

money.htm and last

flash.htm

FOCUS- Asia stocks rally, fragile currencies stable +


What I think ( at the moment) - Go short at Dj 8600 or S&P500 1050

Wait until market hits 1100 and look to go short - the rally was somewhat unexpected by the futures market and didn't turn quickly enough because of tailgate - bonds weak and dollar flat - Rally was built first on good earning reports that are difficult to take into account then rally in Asia and Europe.

The technical aspects ( breath, leadership and futures ) are still weak. Too late and too risky to go long even with WI ( wiredbrain index at + 11.5 )

The trouble with all index and measures is that they are about what happened -

The market went up so a lot of measures when up - builds momentum and feeds on itself until used up.


Wiredbrain's Index last week instant = + 11.5 (on scale from -15 to +15) nothing so far on the

Tailgate thing - bond rally back, dollar recovers - `` We are seeing a bit of profit-taking,'' said one. ``

The Dow is looking to open around 30 points lower.''
-

Bloomberg backup International markets:

Yahoo International not working this morning go to

my.yahoo.com sign in as "wiredbrain" password "synergy" and open major markets - see the individual stock picks for the next century.


BRIDGE International markets

We miss the tops and bottoms but catch the safe middle of waves. System is only in process - I don't have all the parts together but it's coming along - with more resources we could do a lot better - maybe one of your tech connections would be interested in making the model better and commercial -

Free is what free does - with money you can do a lot more than you can without - Each international market needs to be figured for the % of capital worth - balanced with currencies so NET loss or return on investments -

The links between interest rates and stock prices is better understood than I can use with current technology but could be linked real time...

The tech index is linked better to S&P500 than the DOW but clearly the tail that wags the dog.

Objective data is better than subjective analysis BUT the factors keep changing so the model need to change all the time. This is double level models = a model that models itself to see how it's doing and corrects the weights as it goes along. Sometimes currencies matter ( within a range ) sometimes interest rates ( within a range ) sometimes earning, sometimes news, most of the time foreign markets because we are really global - one interconnected world market.

Wait until total Wiredbrain index turns down - 6.5 or more.

The major problem is minor variations being taken as a move and being cut out too soon - you have to take a position and hold it long enough to really get something out of the move but not too long.. Let tech stocks be your guide - a lamp unto your feet.

$IXCO NASDAQ High Technology Index Will most likely turn and

the market will follow ? Individual Tech stocks see,

(PSE)


Moneynet "Things are a bit unsettled



Money online

CNNfn:


SHORT TERM ( a few days) = TOP of

wave long term about flat

TOTAL GLOBAL January RALLY is weak under mixed-up


News and analysis GO TO Money pages first

long.htm, then

conditions.htm, then

money.htm and last

flash.htm Asia's Markets were UP 6 % to 9 % now down a little. Interest rates up a little ( bond prices down ), Dollar a little weaker, no leadership from tech stocks, technical weakness in market - depends on earning reports Monday and Tuesday - as the MOB is running looking backwards - It's next years earning stupid not last quarters. Global shifts in currencies and market buying power take up to two years to show up. Now is the time to start to shift back to under priced markets from over priced US assets and dollars .

(MAP)



SEE ANALYSIS on how the

US market could drop 10 % and

why

Have a nice DOWN day ,close longs and open down positions ; you can check the markets by using

BOOKMARK.htm


The long term US 30 Y bond is from 56.95 to ·

.0585 .

Growth rates:

With 325,000 more jobs per month for the last few months - there are clearly more people working, spending and paying more taxes.

The upward cycle creates more sales, business and more jobs and more growth. So why can't it go on forever ?

More creates more until there is too much - boom and bust -Too many new houses, offices, shopping centers, potato chip and computer chip factories, too much inventory and the prices stagnate, while labor cost increase and profits drop, investment in new plant and equipment drops - and a downward cycle begins. With a very diversified economy it does not happen all at the same time and at the same rates. Auto sales, home sales, computer sales, medical services, military sales, all have different growth cycles.

All of this is now happening - falling prices because of over production relative to effective demand and the high price of the dollar makes imports cheap and exports expensive; with Inflation in skilled labor costs, Deflation in commodities and imported goods. A mature economy can only expand so fast for so long until the point of saturation. Developing markets can expand much faster and for longer. Lower interest rates encourage investment, consumption and may weaken the dollar if low enough but also hurt banking and maybe inflationary. Remember stag-flation ? Prices in dollars can go up while real income and earning don't.

So what can public policy do to promote a "soft landing" with real growth rates under 2 % but not turning negative ?

The things that are likely to do any good are politically unpopular and the actions that are politically popular will do little good. Popular policies most likely will make things worse. Popular or not policies that work pay off politically. All social systems depend on leadership ( with the consent of the governed ). Government for the people but NOT by the people or of the people - Lincoln was a leader - came from the people but was extra- ordinary.

First, open new markets - mainly in Latin America as well as South and Central Asia, Africa and where ever we can. Fast track and the American trade zone from Canada to Argentina is a great idea.

The market for computer services, telecommunications, consumer products is very important. Blocked by narrow interest groups and the money needed in politics!

Second, public works - repair all those water systems, highways and bridges, parks and schools, even with a reasonable deficit - yes a deficit is useful at points in the business cycle. Public education is a national responsibility not a local matter. Human resources are our most important product and major deficit. Blocked by narrow interest groups and the money needed in politics!

Third, encourage saving and investment by rational tax policy - reduce or remove capital gains, replace taxes on interest with an alternative minimum tax. Third, move toward a VAT consumption tax and off taxes of income and earning. We also have to adjust benefits by using means tests for Social Security, MediCare, VA and other benefits. Reform of the benefit programs allows for constructive public infrastructure improvements, human, social and physical. Blocked by narrow interest groups and the money needed in politics!

If the incumbents want to be reelected they should think seriously of the state of the economy next fall and in two years. All good things take time and action now is required for 1999 and 2000.

But, our political system doesn't work and only does too little too late and there is no will to fix the system - fix the system not the blame. At the end of the American Century we are no better governed and no wiser in our collective actions than we were a century ago. Every other country in the world has made remarkable constitutional and political progress in this century except the USA which may have gone backwards. We are were richer, better educated, more mobil and as well organized as others a century ago and have continued to make progress except in critical areas of public affairs.

Our public schools have not changed in structure, and are poorer in performance than 100 years ago. Public Policy making is not improved and forward thinking perhaps has declined. WE ARE THE only INDUSTRIAL COUNTRY WITHOUT A RATIONAL SCHOOL SYSTEM, HEALTH CARE SYSTEM, WELFARE SYSTEM, industrial or economic, transport, or communications policy. It's all bits and pieces without clear goals or operational systems.

The actions of a century ago such as anti-trust, national parks, labor laws, food and drug administration, the regulation of railroads, banks and markets would be impossible now. All would be Blocked by narrow interest groups and the money needed in politics!

Now any other business without change in a century and a poor P/E record would be a candidate for re-engineering, bankruptcy or unfriendly takeover.

The people have it right when they distrust the government and don't participate.

They don't care about Clinton's sex life because they don't really care about the government or think politics are important. Live and let live, as long as govenment is not believed to be important in their personal lives.

They are turned off for very good reasons - it just doesn't matter or work for them.


The emperor has no clothes.

Copyright © 1998

Charter Media, Inc. All rights reserved.


The rally since mid-January was not supported by any fundamentals. Now it is becoming clear that first quarter numbers will be a problem, maybe a big problem.

The consensus estimate for year/year first quarter earnings has dropped to 4% from over 10% in just a few weeks. And that was before Disney started guiding analyst estimates lower Wednesday morning, and Intel warned about first quarter earnings after the close.


The Intel warning is huge.

Their statements suggest that earnings for the first quarter will be less than $0.75 a share, compared to expectations of $0.92 or so. Intel traded down to about $73 in after hours trading after closing Tuesday above $86. This alone will take the Nasdaq down a lot, but the news will also take a lot of tech stocks down big. Dell was 5 points lower in after hours trading as well.

Frankly, with earnings numbers for the first quarter looking like slower growth than the fourth quarter posted, the downside risk is that all of the 1998 rally could dissipate. Intel said domestic demand was weak, not just Asia, and Disney's slowdown wasn't Asia related. So, now there is potential domestic weakness in the earnings numbers to go with the Asian weakness that has been ignored.

We were going to put short-term sentiment at slightly bearish even before Intel warned but now the reading has been dropped to straight bearish. Intermediate-term sentiment has been dropped to slightly bearish, because the market is now going to be obsessed with actual and potential earnings warnings.


March could prove to be a very rough month.

S&P 500 P/E Now 26.2, or 23.5 if You Prefer - 6 over value 6/23 = 26 %

Given a closing value of 1055.69 on the S&P 500 on Friday, March 6, this leaves the price/earnings (P/E) ratios as follows:

As reported trailing 12 months P/E = 26.2

Operating earnings trailing 12 months P/E = 23.5

Year ahead (1998) operating earnings top-down P/E = 21.2

Using any of these measures, the P/E is at extremely high levels.

As Reported vs. Operating Earnings

In recent years, the stock market has come to accept a wider definition of what should be excluded from earnings data in terms of determining the value of a company.


The simple fact is, any one-time charge or loss is a very real accounting event that decreases the value of a company. When a company takes a charge for acquisition costs, excess inventory, discontinued products, or whatever, it is always a negative event and often reflects bad management decisions. It is not a good thing.

Yet, the stock market prefers to completely ignore these items and instead look at "operating income."

The theory is that operating income reflects the future prospects for the company and the "real" operations of the company. Behind this assumption, though rarely noted, is that there will be no more future, recurring, one-time charges that also cost the company (and shareholder) money.

A better way of looking at one-time charges, in fact, is to view them as costs to the company over a period of time. Ignoring them altogether simply denies they exist. In the case of a single company, it might make sense to virtually ignore one-time charges because looking at them over an extended period would have little impact. One-time charges for a company that does not regularly engage in taking charges can generally be ignored.

However, when aggregating 500 companies, the one-time charges should not be ignored. Across a universe of 500 companies, "one-time" charges occur each quarter with regularity.

They are, in effect, recurring costs to the aggregated companies. Acquisition costs, inventory write-offs, and bad decisions occur on a regular basis for the overall S&P 500.

They are a cost of doing business.

Rose Colored Glasses

It used to be common to assess the earnings for the S&P 500 in terms of the "as reported" numbers, the honest-to-God real numbers that companies posted, taking in all the good with the bad. This still makes sense but is not commonly done anymore.

Instead, the market now vastly prefers valuation based on operating income. After all, no one ever seems to care what one-time charges on individual companies reflect, they just want to know whether XYZ Corp. "beat by a penny" or came in "as expected," so why should anyone care in the aggregate. And, it makes current valuation levels at least a little more reasonable.

P/E's Sky High by Historical Standards

Either way though, the current valuations are very high. On an as-reported basis, the market P/E is now over 26. On an operating basis, it is over 23. This compares to a historical P/E on as reported numbers of about 17 or less for many decades, and to one old rule of thumb that the market P/E should be 20 ( 5 % ) less the rate of inflation.

Of course, there is widespread belief that there is a new paradigm, that the old measures just don't matter anymore.

Money is still money, however, and investments still need to provide a rate of return. No matter what paradigm is fashionable this week, the return on investments is still a function of future profits, and the discounted present value of those future profits based on an inflation/interest rate assumption. This reality raises red flags for those concerned with valuation.

Earnings Projections Plummeting

As noted in Yesterday's Brief, first quarter earnings estimates are falling fast. Even before the Intel, Motorola, and Compaq warnings, the consensus estimate for first quarter year/year earnings had fallen to +3.7% from about 15% as recently as early January. Give it a few weeks and the number could be getting disturbingly close to zero.

Our analysis of Friday's session can be summed up in one word - absurd... That may seem simple and harsh to many of you, but we find no better way to explain a market that rallied sharply higher the day Motorola warned that earnings would fall short of estimates, and the day after Intel made a similar announcement... Current quarter earnings estimates in the tech sector are coming down fast and it's still very early in the warnings season... What's particularly disturbing about this fact is that the problems aren't related to Asia but here at home...

The full impact of the Asian crisis won't be felt until quarters two and three of CY98... Unlike past quarters, the problems aren't confined to one industry... Chip, chip equipment, disk drive and PC stocks are all warning of earnings trouble ahead... Compaq is the sector's latest victim... After a number of cautionary comments in recent weeks, the firm confirmed the market's worst suspicions and announced that it would break even in the first quarter on flat revenues from a year-ago... Street had been expecting CPQ to earn $0.35... Competition and pricing pressures were cited for the shortfall... If PC growth estimates didn't come down with the Intel news they will now... And fewer PCs sold means fewer chips needed, disk drives made, operating systems installed, etc... If you ignored the warning signs on Thursday, you got lucky Friday... Don't expect lady luck to smile on you again today.

<BR><B><h4> The author


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money.htm

Federal Reserve Chairman Alan Greenspan:

``

The slowdown is also considered healthy, given a degree of 'irrational exuberance' seen in assets markets in the past couple of years,'' He suggested the stock market was getting excessive and the market paused for a moment, thought about it, and went up again. "( in some areas and markets ) the momentum to domestic spending is not being offset significantly by Asian or other developments, the U.S. economy is on a track along which demand could press too strongly against available resources ( skilled labor ) causing inflation.

"( and in other areas and markets ), forces from Asia will damp activity and prices by more than is desirable by exerting a particularly forceful drag on the volume of net exports and the prices of imports," he said. ( balance of payments problems = lower dollar and bond prices = raising interest rates )

With the current situation reflecting a balance of strong countervailing forces, events in the months ahead are not likely to unfold smoothly, he said.



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What is the future all about?

Remember this : con't on

PACKETS.HTM

Monopoly power is what it's all about.

The myth of the free market applies to very few temporary situations. In almost all market areas a few firms dominate the markets, sets prices and controls the industry, such as the seven sisters in oil, DuPont and G.M., IBM, now Microsoft. Any industry starts with lots of firms but over time one ( out of four finalist ) gains a controlling market share and by predatory practices comes to control prices. In Breakfast cereals, Post and General foods, Milk marketing with Borden's, Cigarettes Philip Morris and Bud's beer, Airlines and Chips are moving toward controled markets.

The only way to make more money than the average is to have more than the average market power. Technological up to a point but it's hard to keep a technological advantage. It is NOT that monoplies are the best but they are the kings of the hills and can do a lot of shoving from a strategic position. Everyone including Bill Gates knows this.


The future is about IT - information technology.


The future is about the LINKS between networks, the communications between servers, information and services - banking, finance, travel, production of good and services on a global scale.

The PC is a transition product between the main-frame and the digital information utility. Microsoft's market power in the OS of DOS NT/windows - the operating system gives them leverage over the software market.

The OS can be and will be built into the CPU. - a OS as a open "smart" central processor. On a main frame you can run programs in many languages, the *CPU is a General system that translates Java, Windows, XML into a universal digital control center's general machine language.

The interface with the program enabled flash memory can include real time Video and sound, different Graphic user interface options and flexible BIOS using the ... wireless, cable, low orbit satellite, wide band, broad band, inputs from the World Wide Web combining XML with Meta Content Framework (MCF), which is how Web sites containing programs and operations "describe themselves" to the BUS, BIOS, CPU and the rest of the digital world.

Office productivity products, communications, games, news, banks, bond and stock markets, insurance, design and production of technical and clerical services, lawyers, travel agents, class rooms, conferences, and 1001 other activities become web sites which downloads operational information, content, file management, and become interactive services, rather than something loaded on a PC hard drive - all it takes is bandwidth and lots of it...IT information technology..

A $1000.00 to $8,500 PC ( for 36 months = $25 to $250 ) work station with a $375 office product ( $ 10 month ) becomes part of a $50 to $250 a month complete package including the lease of machines and the communications link, storage, server, services that includes telephone ( $ 35 ) ( video phone) fax, digital satellite TV, ( $ 35 ) private high speed networks, video, CD music and life style programs on demand with many other new services not invented yet, - the SUPPER GLOBAL PHONE COMPANY, the world on line . TELECOM communicator -

Monthly costs - $100 machine + $ 50 software and internet services + $ 35 telephone + $ 20 Fax + $ 35 cable = $250 can be offered at twice as much for 1/2 the price e.g. $125 for video phone, fax, cable, hardware and software, AOL, MSN type services ( Mobil & wireless services with no long distance charges ) $ 400 current price for $ 150 - what a value !

A billion global current clients willing and able to pay - add 1/5 billion per year = $ 150 billion cash flow = 1.5 trillion capital worth with 50 % growth rates. You need to own the satellites as the critical OS technology, can lease time on ground stations and up links, there is a market for a lot of high speed digital switches, and many alternatives for the last few miles in the down load delivery and feed back systems - Direct TV, cable, optic fiber, broad band, wideband, DSL, etc Who can play and who will do it ? AT&T, WorldCOM/ MCI, Bells, DT, and the EU - Motorola, GE NBC, MicroSoft, Time/Warner,

The NewsCorp, Intel/IBM and friends there will only be a final four - a few firms will dominate the markets, sets prices and control the global industry.

In the near future ( a few years ) most homes and offices, home offices, schools, libraries will have a [Greek têle-, from têle, far off.] Window =[Middle English, from Old Norse vindauga : vindr, air, wind + auga, eye.][Middle English communen, from Old French communier (from Latin commúnicâre). See COMMUNICATE and from Old French communer, to share (from commun, common). See COMMON.]


The spirit in the world "deus ex machina",

Wireless Internet & Mobile Computing reports that Microsoft is investigating a variety of strategies for increasing its role in mobile communications. Strategies include: enabling its LAN software to transmit information via wireless networks, using the Microsoft Network's Internet capabilities to facilitate wireless communications and placing versions of Windows CE into wireless products.

``When Bill Gates talks about 'information at your fingertips,' he's dead serious about the long-term strategic importance to Microsoft. Businesses that can help Microsoft achieve that goal -- such General Magic -- are under scrutiny,'' Reiter says.

Wireless Internet & Mobile Computing says to evaluate Microsoft's actions it's crucial to understand that the global mobile communications market is undergoing a dramatic transformation that involves creating ``smart,'' multi- function devices that will eventually replace today's ``dumb,'' single-purpose pagers and cellular phones ( PC and network computers )

Utility communications devices.

``Microsoft will be working with and competing against a variety of large and small companies, such as Motorola (NYSE: MOT - news), Geoworks (Nasdaq: GWRX - news), Sun Microsystems (Nasdaq: SUNW - news) and Unwired Planet, that are racing to product bandwidth-efficient platforms and applications for new generations of devices,'' Reiter says.
`We saw a very strong start today, people started the week looking to get into the market even at these high levels and the mood is good,''

The record-breaking pace came after Friday's buoyant stocks performance when the big European bourses closed at or near record levels with bid speculation and low global interest rates attracting cash-rich institutional investors.


SEE ANALYSIS on how the

US market could drop 10 % and

why ?

LONDON, Feb. 18 (Reuters) -

The U.S. and European equity markets have benefited from recent reductions in cash holdings but are vulnerable to further shocks, fund mangers told Reuters Television on Wednesday.

Andrew Milligan, economic adviser at General Accident Investment Management, predicted U.S. corporate earnings could slow to between four percent and six percent this year due to the Asian slowdown.

``

The main worry we really have at the moment is earnings,'' he said.

``A lot will depend on whether U.S. companies can force through double digit earnings growth in a much more difficult environment than before,'' he said.

``We think earnings are likely to disappoint later in the year and this could be the cue for a 10 percent equity market correction.''


The 32 economists participating in the Philadelphia Fed's quarterly survey of professional forecasters projected a growth rate of 2.5 percent for the first quarter of 1998, down sharply from a 4.3-percent fourth-quarter advance gross domestic product growth estimate from the U.S. Commerce Department.

Economists surveyed said they expected average GDP growth of 2.8 percent in 1998 and 2.4 percent in 1999.

Milligan attributed much of this year's recovery in the U.S. and European equity markets to reinvestment by British and European institutions.

``Many large institutions which had very high cash weightings took advantage of slates being wiped clean at the start of the year to put cash into the market,'' he said.

Stock Market Divorcing Itself from Real Story?

Cognitive dissonance:

A psychological state that occurs when an individual questions an action s/he has taken and seeks reassurance that s/he has indeed made the right decision and/or when the message and the source are in conflict, you believe the message but don't trust the source, or trust the source but don't believe the message.


GEORGE SOROS:

and common misconceptions: the division between conventional wisdom and reality.


There is a strong epistemological argument, elaborated by Karl Popper, in favor of the open society ( and mind ): Our understanding is inherently imperfect; the ultimate truth, the perfect design for
society, ( or business, or school, or political system ) is beyond our reach.
We must therefore content ourselves with the next best thing -- a form of social organization that falls short of perfection but holds itself open to improvement ( like me, you and all of us ). That is the concept of the open society: a society open to improvement.

The more conditions are changing -- and a global economy fosters change -- the more important the concept becomes.

A global economy is characterized not only by the free movement of goods and services but, more important, by the free movement of ideas and of capital. This applies to direct investments and to financial transactions. Though both have been gaining in importance since the end of the Second World War, the globalization of financial markets in particular has accelerated in recent years to the point where movements in exchange rates, interest rates, and stock prices in various countries are intimately interconnected. In this respect the character of the financial markets has changed out of all recognition during the forty years that I have been involved in them. So the global economy should really be thought of as the global capitalist system.

Financial markets are inherently unstable, and international financial markets are especially so. International capital movements are notorious for their boom-bust pattern. During a boom capital flows from the center to the periphery, but when confidence is shaken it has a tendency to return to its source. I have seen many ebbs and flows and booms and busts, and though I fully recognize that international capital markets have become much more institutional in character and demonstrate much greater resilience, I cannot believe that the present boom will not be followed by a bust until history proves me wrong.


The risk of a breakdown is greatly increased by the fact that our theoretical understanding of how financial markets operate is fundamentally flawed. Economic theory has been built on the misleading concept of equilibrium. In my view, equilibrium is elusive because market participants are trying to discount a future that is itself shaped by market expectations. For instance, a company whose stock is overvalued can use that to justify the inflated expectations of its shareholders, but only up to a point. This renders the outcome indeterminate, and it is only by accident that the actual course of events corresponds to prevailing expectations. Market participants, if they are rational, will recognize that they are shooting at a moving target rather than discounting a future equilibrium.

The theory of rational expectations makes the heroic assumption that market participants as a group are in a position to discount the future accurately. That assumption may yield a hypothetical equilibrium, but it has little relevance to actual market behavior -- and neither market operators nor regulators have ever fully accepted the theory, exactly because they are rational people. I am told that economic theory has gone a long way toward recognizing and studying disequilibrium situations.

This brings me to the most nebulous problem area, the question of values and social cohesion. Every society needs some shared values to hold it together. Market values on their own cannot serve that purpose, because they reflect only what one market participant is willing to pay another in a free exchange. Markets reduce everything, including human beings (labor) and nature (land), to commodities. We can have a market economy but we cannot have a market society. In addition to markets, society needs institutions to serve such social goals as political freedom and social justice.

There are such institutions in individual countries, but not in the global society.

The development of a global society has lagged behind the growth of a global economy. Unless the gap is closed, the global capitalist system will not survive.

By Pierre Belec

NEW YORK (Reuters) -

The economy is slowing, corporate earnings are slipping and Asia is still a time bomb just waiting to explode again but the stock market keeps making new highs. Has Wall Street gone nuts?

"

The fund traders have got to put their money in stocks every day and they don't get paid to build up a lot of cash," said Alfred Kugel, senior investment strategist for Stein Roe & Farnham, which manages $5 billion in mutual fund assets.

"During the events of Asia at the end of October, the fund managers might have raised their cash holdings from three to five percent, but with all the money that keeps coming into 401K and Keogh retirement plans, they had to stay invested," he said.


There's concern that the mutual funds' spectacular gains over the last few years might be creating a false sense of confidence that the market can only go higher.

DAVOS, Switzerland, Jan 29 (Reuters) - Former U.S. presidential economic advisor Fred Bergsten said a sharp plunge of the dollar was the next crisis likely to hit world markets after Southeast

Asia's financial turmoil is over.

In a statement released at the annual meeting of the World Economic Forum here, Bergsten said short-term fundamental factors continued to favor the dollar but long-term fundamentals were increasingly negative.

``

The next major disturbance to the world economy, once the world has safely surmounted the current Asian crisis, is likely to be another sharp plunge in the exchange rate of the dollar,'' he said.

``As always, it is impossible to predict the turning point at which the long-term fundamentals will again dominate the short-term fundamentals,'' said Bergsten, who is director of Washington's Institute for International Economics.

In a global economic forecast for the years 1998-2000, Bergsten said the long-term fundamentals included U.S. trade and current account deficits, which he said were likely to reach $250 billion to $300 billion in 1998-99.

``

The net debtor position of the United States, which has already passed $1 trillion, will shortly exceed $1.5 trillion.''

``

There is no apparent sign of a turnaround in these trends,'' he added.

Bergsten said there were several possible scenarios for what could trigger a dollar plunge, including a sharp slowdown of the U.S. economy or a significant pickup in Europe.


The Nasdaq composite index was up 2.78 points at 1,718.51, boosted by renewed buying of technology stocks.


The government reported that the trade gap jumped 24.3 percent to $10.79 billion in December, lifting the 1997 deficit to $113.75 billion -- the highest since 1988.

Economists had expected December's deficit to swell to $8.72 billion.

"This looks like the effect of the strong dollar ( makes exports expensive, imports cheap ) and it's not proportionately the effect of Asia," said Pierre Ellis, senior economist at Primark Decision Economics. "

There is not a clear message of economic strength from this number. In terms of stock earnings, it's an indicator of problems to come for companies exposed internationally."


If foreign markets or exchange or interest rates are (UP/DOWN) 1 % then the Wiredbrain Index WI is +-
for example if
the benchmark for the long bond is 5.8 % and the current interesy rate is 5.93 this is up 1.3 ( -.13) = WI - 4.2
If Foreign Markets are up 1.5 % then WI = + 5
Actual numbers depend on actual relationships with time delays

08:33 TEMP HELP SERVICES ADD 20,000 JOBS.
08:32 SERVICES ADD 273,000 JOBS.
08:32 CONSTRUCTION ADDS 41,000 JOBS.
08:32 MANUFACTURING SHEDS 2,000 JOBS.
08:32 2 MILLION JOBS ADDED IN PAST 6 MONTHS.
08:31 JAN. PAYROLL GROWTH REVISED UP TO 375,000 FROM 358,000.
08:31 AVERAGE WORKWEEK UP 6 MINUTES TO 34 HOURS 54 MINUTES.
08:31 AVERAGE HOURLY EARNINGS UP 0.6% OR 8 CENTS TO $12.60.
08:31 JOBLESS RATE MATCHES 24-YEAR LOW.
08:31 JOB GROWTH STILL STRONG; EXCEEDS ESTIMATES.
08:30 UNEMPLOYMENT RATE 4.6%.
08:30 310,000 NEW JOBS IN FEB; JOBLESS RATE DIPS TO 4.6%.

THURSDAY:

LONDON, March 5 (Reuters) - U.S. stocks in London fell across the board on Thursday following an earnings warning on Wednesday from semi-conductor giant Intel Corp <INTC.O>

Dealers said the warning, which came after the market closed in New York on Wednesday, could spark some selling of technology stocks when trading begins on Wall Street on Thursday.


They said the broader market was also likely to suffer and the Dow was seen tumbling around 90 to 100 points at its open.


SAN FRANCISCO (Reuters) - Semiconductor giant Intel Corp. stunned Wall Street Wednesday with a warning that its first quarter results would be below expectations due to weaker-than-anticipated demand from personal computer makers.

"Weaker than anticipated demand ... is expected to cause revenue and net income levels to fall below Intel's expectations for the first quarter of 1998," the Santa Clara-based company said in a statement.


The announcement sent technology stocks tumbling in after-hours trading as investors scampered to shed some tech holdings.

Intel's stock fell $10.44 on the after-hours market, trading at $76 a share, down from its closing price of $86.44 on Nasdaq.

The stock had been halted pending the release of Intel's statement.

07:16 GOOD MORNING FROM

CBS MARKETWATCH.




Action in the Futures Market

News Overview:



The U.S. dollar made a steady start against the yen and the mark in early European trade but was restrained by the prevailing market expectation that more economic stimulus measures for Japan would be fourthcoming.

Bonds were rattled by the concern that a surprisingly strong report on February business activity from the National Association of Purchasing Management might reduce the chance that the Federal Reserve will reduce interest rates soon.


The National Association of Purchasing Managers business conditions index came in at 53.3 in February vs. 52.4 in January.


The report also said exports failed to grow for the second consecutive month, and imports grew but at a slower rate than recorded in January while the NAPM's price index showed prices paid by manufacturers were still declining.

MONDAY MARCH 2nd

A record close for all the major indices in London on Friday was matched by the Dow ahead of the weekend, which hurtled above the 8,500 level for the first time, and Tokyo joined in with a 2.57 percent rally overnight on growing hopes the government was considering additional steps to boost the economy.

``We could easily see the market turn around after a tentative start,'' one London dealer said. ``Any talk of bids or takeovers and we'll spring back to life, but a pause is much needed after the run we've had.''

Elsewhere, Italy's Mibtel all-share index rose 1.20 percent to a new record high of 20,128, breaking a previous high of 20,094 set on February 11, and in Madrid share indices started at new life highs, too, heading for key Ibex resistance at around 9,000.

SINGAPORE, March 2 (Reuters) - Asian stock markets rode the momentum of Wall Street's recent climb to start the week positively on Monday, led by solid gains in Tokyo, Seoul and Jakarta.

Regional currencies also got a boost from the weakening U.S. dollar, which in turn lent further support to share prices. At 0638 GMT, the dollar was at 125.35 yen and 1.8058 marks, compared with around 126.10 yen and 1.8180 marks in New York on Friday.


The key Nikkei average ended 2.57 percent, or 432.67 points, higher at 17,264.34, its highest closing level since October.

Tokyo shares advanced on comments over the weekend by Japanese policy-makers concerning measures the government may take to bolster the flagging economy.

---------------------------------------------------------------

---------------------------------------------------------------

EXCITE UPDATES

His former White House chief of staff, Leon Panetta, raised the specter of

Clinton's resignation in an interview published on Saturday by the San Jose Mercury News in California. Panetta said the scandal had created a crisis for the Democratic Party. "If these are baseless charges, it'll be okay," Panetta said. "On the other hand, if there's something there, and it leads to him having to step out of office, it may be time to do some repair work and that may not have the consequences you would expect."

Tailgate does not seem to interest the market at all UP Tuesday and Wednesday

EDITORIAL:

It's not so complex. Clinton is clearly a driven man. He was focused on becoming President. He had character faults. He has great talents. After winning re-election he has been depressed by the pressure of a awful job, and begins to break. He does these very stupid things to force himself into the situation where he has to quit - It's not uncommon, people do things that appear ill rational to force themselves because of mixed emotions and unconscious forces.


Quicken

---- .


Marketwatch from Money


Technologies NEWS & INDEX

30 Y bond Focus is on dollar


The benchmark US 30-YR TREASURY BOND DROPS 1 1/32 TO 102-13. ( from 105 high ) and the yield, which moves inversely to the price, was at 5.94 percent. 30 Y TSY YLD NDX (WCB:^TYX) back to 104 and

6.1

Wall St. is Lower, Hit By White House Scandal

NEW YORK (Reuters) - Blue chip stocks opened higher but soon turned downward Friday after failing to gain momentum from gains in high-tech shares and overnight strength on Asian markets amid concerns about the White House sex scandal.

"Today looks like another uncertain market and most players will probably take a wait-and-see position ahead of the weekend, which could offer more unrest in Asia," said a Danish broker.

In currencies, the dollar remained under pressure, due to concern about the sex allegations against President Bill Clinton and fears that the Asian crisis will take a bigger toll on growth in the United States than in Europe.

WHAT TO WATCH FOR:

The brouhaha added to the recent mood of uncertainty in Wall Street stemming from worries that the Asian economic crisis will trim U.S. corporate profits in 1998. `` It does make you kind of nervous, and when people are nervous, they sell stocks,'' said James Volk, co-director of institutional trading at Jensen Securities. Traders also sold bonds and the dollar.

The benchmark

30-year Treasury


The dollar LOW benchmarks at ECU .88 - 1.75 marks, .564 down from 1.8195 at Wednesday's close, at 1.44 Swiss francs vs. 1.4758. It dropped to 125 yen from 126.88 and closed at an all-time high against the Canadian dollar at C$1.4533, up from C$1.4450.

The pound rose to $1.66 from $1.60 .


The initial target for the DJIA -8127- was achieved on 02/03/98.

The
models are projected to remain bullish until 04/10.

The new target for the DJIA is 8529. ****Check out "ON THE EDGE" - A monthly review of the markets**** ________________________________________________________________________
CURRENT PRIOR MARKET TIMING MODELS READING WEEK CHG CONNOTATION ________________________________________________________________________
CYCLICAL TREND INDEX (CTI): 7 10 -3 BULLISH
MOMENTUM INDEX: 1 3 -2 NEUTRAL
SENTIMENT INDEX: 2 2 0 BULLISH ________________________________________________________________________
DOW JONES INDUSTRIAL AVERAGES (DJIA) CLOSE:................ 8545.72
DJIA POINT CHANGE FROM PRIOR WEEK:......................... 131.78
DJIA PERCENTAGE CHANGE FROM PRIOR WEEK:.................... 1.57%
MARKET POSTURE THIS WEEK:..................................MILD BULLISH
MARKET POSTURE PRIOR WEEK:.................................MILD BULLISH
DJIA TARGET: ORIGINAL TARGET (8127) ACHEIVED 2/3. NEW TARGET: 8529
TIME FRAME TO ACHIEVE TARGET:.............................. 10-Apr-98
DATE CURRENT MARKET POSTURE FORMULATED:.................... 23-Jan-98
DJIA CLOSE ON DATE CURRENT MARKET POSTURE FORMULATED:...... 7700.74 ________________________________________________________________________ CYCLICAL TREND INDEX (CTI).......... 7 CONNOTATION ________________________________________________________________________
09-Mar-98 (Projected) 7 BULLISH
16-Mar-98 (Projected) 7 BULLISH
23-Mar-98 (Projected) 5 BULLISH
30-Mar-98 (Projected) 5 BULLISH
06-Apr-98 (Projected) 5 BULLISH ________________________________________________________________________ MOMENTUM INDEX...................... 1 % CHG CONNOTATION ________________________________________________________________________ 1) DJ Transportation Average 3364.92 -2.5% BEARISH 2) S&P 500 Index 1049.34 1.5% BULLISH 3) NYSE Composite Index 544.26 1.3% BULLISH 4) Advance-Decline Line -3436 41.7% BULLISH 5) 10 Day MA Advance-Decline Line 1.14 -1.3% BULLISH 6) AMEX Index 706.12 2.5% BEARISH 7) NASDAQ Composite Index 1770.51 2.5% BULLISH 8) DJ Utilities Index 271.69 0.6% BEARISH 9) TRIN-10 Day Average 0.94 8.2% NEUTRAL
10) NYSE New Highs-New Lows 565-55 NEUTRAL
11) Zweig Breadth Indicator 0.53 NEUTRAL
12) McClellan Oscillator 32 NEUTRAL
13) McClellan Summation Index 1414 BULLISH
14) Unchanged Issue Index 0.16 BEARISH ______________________________________________________________________ SENTIMENT INDEX..................... 2 % CHG CONNOTATION ________________________________________________________________________ 1) Odd Lot Short Ratio-5 Day Ave 5.14 6.2% BEARISH 2) NYSE Short Interest Ratio 5.8 0.0% BULLISH 3) Public-Specialist Short Ratio 1.33 0.0% BULLISH 4) Put/Call Ratio-10 Day Ave(INDEX) 123 -6.0% BULLISH 5) Dividend-Yield Spread 5.04 -2.2% BULLISH 6) Mutual Fund Liquid Asset Ratio 5.00 -10.7% BEARISH 7) Bullish Investment Advisors 46.0 0.2% NEUTRAL 8) Bearish Investment Advisors 28.2 -6.9% NEUTRAL 9) Bearish + Corrections Total 54.0 -0.2% NEUTRAL


Wiredbrain will trade your account for 50 % of net return. You set up an options account ( any on line discount broker, we use Quickway but E-trade, Datex or Suretrade is OK ) and for at least $2500.00, we will trade it for you ( after we have done our own ) with the expectation of 100 % return a week of funds at risk. ( some weeks there are no good trades) You send us 50 % of the profit and we will continue to do trades for you at the moments it right to do so, since you don't have time to watch the market the way we do.

<BR><B><h4> The author


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AND FREE HELP and education:

http://www.cboe.com/intro/whatis.html is a good place to start.

The CBOE booklet is very useful and free.

There is TOO much to learn all at one time - so you need a step by step method - Etrade has some educational materials - You will have to request the options trading form and you could enter my name as a authorized trader. All we are doing is index trades - if the market is going down we buy puts ( OEX has the volume and P/e ratio that works best at the moment ) look at

http://cboe.pcquote.com/cgi-bin/cboeopt.exe?TICKER=ndx&ALL=1 NDX JAN 980 PUT at 10 1/2 is $1050.00 for one -up $300.00 from 7 in the last few minutes, each point is $100.

http://cboe.pcquote.com/cgi-bin/cboeopt.exe?ticker=OEX the OEX is at 454 the PUT just under the cash price is the Jan 450 .OEXMJ at 6 3/8 ( $637.50 ) up $112.5 NOW 19 1/ 8 + 11 1/ 8 $1912.50 300 % gain in two good days

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EURO STOCKS:

- Volatility in

ASIA spreads to Europe


-

NEWS TRACKER Tailgate


CHECK BRIDGE NEWS


DRUDGE REPORTS have more impact than the Wall Street Journal


The dollar also suffered from rumors that Treasury Secretary Robert Rubin may resign. That rumor was quickly denied by the White House In late-New York trading, the 30-year Treasury declined 1 7/32, to yield 5.964 percent.

The 10-year note fell 25/32, to yield 5.679 percent.

The shortbill's discount rate increased 3 basis points to 5.03 percent..

http://nt.excite.com/242/32242/ EXCITE STORY

A Year of Living Dangerously: ( Movie about Indonsia )


SEE STOCK PICKS
All to high now,

The U.S.' top cable-TV companies are in talks with AT&T CORP (Mondy's close 63-3/16) about the company investing in a cable-industry Internet-access venture, the Wall Street Journal said in its electronic edition. Citing executives familiar with the talks, the Journal said AT&T might be interested in a partnership with a potential joint venture between TIME WARNER INC's (Mondy's close 63-13/16) Internet-access unit, Road Runner, and AT HOME CORP. (Mondy's close 25-1/4)

The cable companies have been discussing merging Road Runner with At Home, whose backers include cable operators TELE COMMUNICATIONS INC. (Mondy's close 27-29/32), COMCAST CORP (Mondy's close 32-3/8), COX COMM (Mondy's close 36-1/2) and CABLEVISION SYSTEMS CORP. (Mondy's close 87-3/4) AT&T declined to comment, the Journal said. AT&T's investment could total as much as $1 billion, most of it cash, the Journal said. In exchange, AT&T would receive new shares in the service. (Reuters 03:41 AM ET 02/10/98)

________________

The story: Bill Gates wanted to look good and impress everyone with his success. He decided to measure Microsoft accomplishments against General Motors. His comparison went like this:

If automotive technology had kept pace with computer technology over the past few decades, you would now be driving a V-32 instead of a V8 and it would have a top speed of 10,000 miles/hour (16,000km/hr). Or you could have an economy car that weighs 30 pounds (14 kilos) and gets a thousand miles to the gallon of gas. In either case, the sticker of the new car would be less than $50.00.

In response to all this goading, GM responded:

"Yes, but would you really want to drive a car that crashes 4 times a day?"

GM continued by stating that if Microsoft built cars:

1. Every time they repainted the lines on the road, you'd have to buy a new car.

2. Occasionally your car would die on the freeway for no reason, and you'd have to restart it. For some strange reason, you'd just accept this and drive on.

3. Occasionally, your car would stop and fail to restart, and you'd have to reinstall the engine. For some strange reason, you'd just accept this too.

4. You could only have one person in the car at a time, unless you bought a Car95 or a CarNT. But then you'd have to buy more seats.

5. Macintosh would make a car that was powered by the sun, was twice as fast, twice as easy to drive-- but would only run on 5 percent of the roads.

6.

The macintosh car owners would get expensive Microsoft upgrades to their cars... which would make their cars run much slower.

7.

The oil, engine, gas and alternator warning lights would be replaced by a single "general car default" warning light.

8. New seats would force everyone to have the same size butt.

9.

The airbag system would say, "Are you sure?" before going off.

10. If you were involved in a crash, you would have no idea what happened.


CBS - DBC Headlines:


MARKET HEADLINES ________________________________________________________________________

The first law of science is that energy and matter is not created nor destroyed, and the second is like unto it; to every action there is a equal and opposite reaction. In the normal course of transactions there is a buyer and seller, money is transferred from one to the other, the debit is balanced by a credit and the world is no richer. Both sides benefit from trading so there is synergy - not a zero sum games but mutual gains.

But Governments and central banks can create money from nothing . With the authority of the state the central bank can add funds to treasury accounts that are not debits to anyone's account but additions to the issuance of notes, bonds and certificates of public debt. When the debt is raised it is done by creation of instruments of obligation to pay.

The US Federal reserve can create treasury accounts based on deposit of bonds which it has issued. Since the government has with the central bank hundreds of billions of treasury notes and bonds on account, it owes itself money and pays itself interest. In this way governments can make something of nothing but rests only on the faith that it will pay.

Value is like the holy ghost of money. When the value of US bonds increases the numbers in the treasury accounts go up. When the stock market goes up the value of stock accounts rises but no debits are made to any other account.

There has been and increase without decrease. It defies the laws of physics. BUT… it goes both ways - what spirit has created, the spirit can take away.


The whole financial system depends on the mystery of faith. If the belief that paper is money holds then the value of the money stocks and bonds is solid. When there is a massive failure of faith the system fails.

The global system is having a crisis of faith.. . Mistakes: When we hit tops or bottoms of life events including market moves it's easy to make mistakes.

The point is to recover quickly and keep both directions open -don't get tied up or down. In sailing, mountain climbing, or options trading- skill, planning, knowledge can be tested by sudden and unexpected forces of nature.

The survivors don't make many fatal mistakes by being prepared and careful .


How markets work:


The market is first of all Global but effected by local as well as international forces. We are in the early stages of

THE THIRD WAVE, the global markets for information, design and production of goods and service. In the first wave the ownership of land was center of economic and political power in traditional societies.

The second wave replaced feudal aristocracies with capitalist nation states.

The model industries were railroads, steel, autos then in this century petroleum, electric and chemical.

The next century’s third wave industries have to do with symbols, speed and information transfer.

The ability to "catch-on" quickly to new technologies in a global context has never been more important.

The model industries are software, the domination of this new world is by communication networks, satellites, bandwidth, and

Moore’s Law, twice as fast at half the price, every 18 months, quite different from the industrial model. We are still controlled by industrial age thinking, schools, politics, and economic thinking.

We need to begin to think of world markets and quick response to fast moving global forces.

The currencies, bond and futures markets have been fast and global for a decade.

The stock markets are just catching up. Since futures have a broader overview they become the tail that wages the dog. When values get out of line global futures will jerk them back into a more reasonable place. If Asian currencies were out of line, hedge funds start the process of a correction. If American shares are over valued, futures will pull them down. If now markets have over reacted as they are prone to do and there are real values in depressed markets, fast moving international forces will correct that situation as well.

Think of the price in any particular market as being on the end of rubber bands with different forces and different levels of elasticity. Currencies rates and interest rates are very elastic within their range -

The rates for money and exchange rates can change within a limited range and have little or no effect BUT if they move quickly and out of range can be very important.

Economic forecasts and statistics have short term impacts. Often the propensity exists to move one way or the other and small events set off an avalanche. World economics are very large and can not shift quickly.

The trends are clear and do not change quickly. People’s attention span’s are much shorter and they will suddenly notice some trend that has been around for awhile and react quickly. Last year the importance of

Global telecommunication was very clear but more attention is now being paid to ASDL, DSL, satellite phones, etc.

The network computer ( called by many names ) will be the event of this year but people have yet to notice. Next year the broadband low orbit satellites will be in place and the combination of network utility devices and broadband digital telecommunications will begin to revolutionize the world, and then people will notice the reality of the third wave.

Fundamentals:

Prices are over time effected by ROI, the return on investment, a income stream from interest and earning. Net earning are effected by tax law, and other extraneous factors but mostly by the quality of management, intelligence and foresight of specific companies in a specific industry and the health of the general economy. Microsoft can command a high price because it is in the cutting edge industry and has shown an ability to invest as well as develop products in the technology of tomorrow. IBM, DEC and other computer companies lacked foresight, quickness and imagination in the rapidly changing world economy.

I suggested the end of the Clinton administration some time age but not for the current reasons. ( see

Images of the future) I agree with most opinion in Europe that the welfare of the Free World is subject to the most extreme forms of Journalism - Starrr is unpatriotic, the welfare of the Republic is more important than the issues involved - and wiring conversations about the Presidents sex life is clearly going too far.

The system is broken as well as the characters involved.

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