disintermedation
disintermedation
(
click)
We are such stuff -
As
dreams are made on, and our little life - Is rounded with a sleep.
GUIDE MADE BY ALTAVISTA TO
WIREDBRAIN
SITE AS OF NOW (DONE NOW) advanced search add key words
to search site
Key Word "wiredbrain" HotBot
has most of the 365 synergy Documents
GO TO:
TODAY'S
NEWS about Networks and Communications
MESSAGE CENTER
Contents:
Continued on - please let me know about errors ! Some of these pages date back up to 10 years ( 1992 ) and have been through many editors and transfers. News about what's happening and for updates use GlobalVillage Excite NewsSearch -
pflaump@cfl.rr.com -pflaump@cfl.rr.combrpflaump@cfl.rr.com"Companies of the future"
Click for Portfolio User "wiredbrain" password "synergy"
Go to AltaVista Advanced Search
first check into
Search
Synergy Site keys to knowledge and information
Papers.htm
picks up news from May 15th on and continues from there to
The new
pointcast
wiredbrain channel
Networks.htm about
the China Connections.
Continued on - please let me know about errors ! Some of these pages date back up to 10 years ( 1992 ) and have been through many editors and transfers. News about what's happening and for updates use GlobalVillage Excite NewsSearch -
pflaump@cfl.rr.copflaump@cfl.rr.copflaump@cfl.rr.copflaump@cfl.rr.comF="home.htm">"Companies
of the future" page
This page
is
Continued on - please let me know about errors ! Some of these pages date back up to 10 years ( 1992 ) and have been through many editors and transfers. News about what's happening and for updates use GlobalVillage Excite NewsSearch -
pflaump@cfl.rr.cpflaump@cfl.rr.cpflaump@cfl.rr.cpflaump@cfl.rr.comFONT cOLOR="#FFFF00">
The nature of
change
in our times
People still do not believe there
is only one world.
There is now only one large market with business and
capital moving freely. Global markets means the different exchanges are
part of one system moving with the time zones but linked together.
The
idea that you gain protection by spreading investments around in "foreign"
markets doesn't work. Major shares are traded 24 hours and are reflected
on the open of the US markets from actions taken elsewhere.
We have been
reporting the earning problem for weeks - only now has it become "common",
next year they will notice the return of Asia's markets.
The IMF and OCED
forecasts have been know for a week. Slow news in no news.
The only way
to do better is have better information, faster and a sense of navigation.
(
FX concern
DJIA should go down 5 % to 8 % 625 points to be in
sink with ROI @ 860 UNLESS interest rates drop, current forecasts of higher
interest are all wrong and out of date:
LIBOR JAN98 94.31
this is = to a cost of money on the world market of 5.69 % ( 1 - .9431
) IF this changed to 4.69 % down one percent in interest rates =
bond prices up 10 % the "paper" value of global assets ( stocks
and bonds ) go up 5.000 billion $ from 50 trillion to 55 trillion. ( 12
% US Gov. debt, 12 % US stocks, go up in "paper" value a trillion $ ) This
is possible to support recovery in Asia, prevention of bank defaults, growth
in Europe and the re-election of current office holders, who always
want cheap money and rapid growth vs. central banks that want to be party
poopers and worry about inflation, speculation and general moral character.
The world has lost more that two trillion in assets in the last 3
months, could go down at that rate for sometime unless interest rates drop,
as they will.
Each .1 % change in LIBOR can add or subtract 500 billion in global
assets.
IF we face global deflation this is a correct policy and the
cost of money is over valued. Clearly it's easier to repay debts
with "cheaper" money. Tight money can cause a global crash.
The danger
of inflation is far less than the threat of defaults. An injection of 4.5
trillion into global markets would be quite healthy.
The G-7 (11) should
get together on such an injection 10 % at a time. 5.7 to 5.6 etc. so that
different rates in different countries at different times don't upset FX
rates. We need a global viewpoint and cooperation. Not as complex as global
warming !
The
news
is Organization for Economic Cooperation and Development (OECD),
which groups the world's developed countries, would make the prediction
in a report just released
Growth rates
down.
The
IMF projected
that the global economy in 1998 will grow at its slowest
pace in five years, an increase of just 3.5 percent.
That forecast represented a 0.8 percentage-point reduction from two months
ago, when the IMF had projected worldwide economic growth at 4.3 percent.
Wed: Watch Technology will turn down at 10:30 and the market will follow
- and it did and it did
The future depends on technology that did not lead
but was draged up Monday. Technology
(PSE)
turned down on Tuesday Afternoon.
Big
chart
The rally is very weak.
$IXCO - 1.15 % 600 will be near year's low for some months at 614
The
50
big Companies
What wrong with this picture. Companies with foreign earning are hurt
by Crisis in Asia but
NFT
(-0.6 %) at 522 is not far from its high of 546.55 - 4.5 % and
has as good a record of any major index.
They hedge for currencies but
what about earning, is this a flight to quality ?
NFT SPX-S&P 500® OEX®-S&P 100® DJIA
Russell 2000®
P/E 23.95 21.36 20.23 20.51 30.97
Dividend Yield
1.55% 1.81% 1.77% 1.91% 1.52%
Last 3 months
7.05% 4.46% 4.79% 5.46% 1.68%
READ THE FINE PRINT if NDX or
goes down or UP, the market will follow, if there is no up
turn the next stop down is 940 running out of range because of change in
ASIA
CURRENCIES down set the tone
They are slowly recovering
U.S. STOCKS SEEN HURT AMID WAVE
OF EARNINGS WARNINGS.
The
babble of the press:
When good News in Bad News - is no News at all.
Why, I ask, is the reporting of the stock market and
economics so poor
. Of course, it's difficult to know why the market
does what it does and opinions are not based on scientific observation
but superstition, magic and witchcraft.
There is a craft of economics and
a logic that is generally accepted in the profession. It is said that you
can stretch economist from here to the moon and not reach a conclusion
but they agree on the variables and the language of discourse. Are
brokers all frauds ? Are investors all fools ? From the reporting
one would think so. It is meaningless babble.
Market
Indications
The
idea that good news
- employment up, incomes up, production up, et
al .. is good news on main street but bad news on wall street is based
on some economic theory.
The theory is that all investments are controlled
by ROI ( return on investments ) or the expected current value of an income
stream or annuity. If you expect to get $ 1000 in a year, you will pay
$ 960 dollars if there is no risk ( the discount rate ) and less depending
on the risk - a junk bond may go for $850 because of some uncertainly that
you will get paid on time. Under conditions of "full employment " the discount
rate goes up - expected returns go up because a lot of people are making
a lot of money in a good market.
There is a greater supply of credit but
more demand as people expand - more of everything, called inflation.
The question remains, will profits increase faster
than costs ?
Are stock are a better buy or will costs cut into profits
? Or are we at the end of a business cycle when speculation overtakes
caution. What the federal reserve can do is to try to restrain the
credit supply, raising the cost of money. This is very difficult at the
moment because of a spreading global banking crisis that requires more
money supply not less. Large firms and brokers ( which are really becoming
commercial banks ) can borrow on the London Inter bank market ( sell bonds
on the world market ) if the domestic rate gets high. Interest rates have
to work on a global basis with global cooperation. If interest rates stay
low with growth over 3.5 %, there is a real danger of inflation: a boom
that goes bust not from wages but from a financial crisis - too much bad
debt, over expansion of questionable projects, speculative construction,
stock inflation, and all the problems now "experienced by others".
The current discount rate can only support a price/earning ratio
of 16 to 18 ( 6.5 % ) not the 20 to 25 ( 4 % ) it is unless profits increase
20 % in the next six months. Maybe they will ?
The risk of profits being
down because of export - import problem is 50/50 - this should cut the
value of stocks back to below 20 or ( 5 % ) so the market is somewhat over
valued.
Since this condition has existed for sometime doesn't mean the laws
of economics have been repealed. Profits have done well ( not as well as
expected ) but most of the surprises have been on the downside. Markets
all over the world have lost up to 50 % of their value in a few weeks but
US is still in the " Emperor has no cloths" mythology - He is the Emperor
( current prices for stock ) so he must be beautifully dressed by the well
paid, oh so smart tailors (brokers grab the money and RUN ). Reality is
not in perception of the beholder ( an ancient Sufi tale ) but our desires
( greed) and social pressure get in the way of reality.
The press
is no different
.
What's this BS that economic reports drove the market
that was already in gear ? Why all this attention to
The Federal Reserve,
AKA as the wizard of OZ, as if they could control world markets ?
Why not say world markets, rates for the dollar and interest
rates were all in sink on Monday Dec 1st - like the planets which are lined
up tonight, it doesn't happen often. Oh! that's it - it's in our stars
not our character, quality, knowledge, wisdom, values, politics or economics
?
Businesses report that steady to declining commodity prices, increasing
competition from overseas and productivity gains appear to be counteracting
effects of wage gains on selling prices for goods, Asian economic woes,
which have spread since originating in Thailand in mid-summer to hit bigger
trade partners like South Korea, were beginning to have a U.S. impact by
November.
"Asian financial turmoil and currency weakness have adversely affected
demand for manufactured and agricultural exports," the Fed said, "And some
districts report increased competition from imports."
Market
Indications
Business leaders said labor markets were tight. Difficulties in finding
both skilled and temporary workers prompted unusual measures. Shipyards
in the Atlanta Fed district were hiring overseas and in Chicago some businesses
were relocating to poorer inner-city regions in a bid to find workers.
the
Fed said.
A strong dollar allows the US to hold down interest
rates which is good for the stock market, but bad for foreign earning (
in dollars) and profits. Exports are hurt by problems in Asia. No country
is an island entire unto itself, we are all part of the global economy.
When Korea, South Asia or anywhere is hurt it hurts us all.
The role of
policy is to help growth everywhere - an international rather than local
view. You can't sell stuff to poor people. A rich Asia makes us richer
not poorer. It's synergy not a zero sum game. U.S. policy MUST support
global interests first - not a popular view but a necessary advance into
"the new order". Do not send to know for whom the bell tolls, it tolls
for us all.
To make money in markets you have to be counterintuitive
- sell in Bull markets and buy when the bears are
out - now is the time to sell -
never wait
for tops or bottoms, never chase stocks going up or down. Buy low and sell
high and be prepared to be even between long and short - as ready to go
short as well as long...
bust
may rise the most in a boom.
(
excellent article from Washington Post )
Sell Short Microsoft
a day for "day traders" to sell calls and buy puts
.
Sell MSQ Jan 130 CALL - MICROSOFT CORP (MSFT) Option Quote15
3/4 3135 CHigh CLow 30 1/4 7 3/8 BUY MSQ Apr 140 PUT - MICROSOFT CORP (MSFT)
7 5/8
OPTIONS
i
nterest
rates Stable to down --
In
late-
New York trading,
On the basis of 2400 stocks traded X are up and Y are down on volume
of 100 million or (x or y)/2400 = % (up or down)
Interest rate down; foreign
Market
Check , Paris , London and Frankfort,
( user "wiredbrain" password "synergy" )
and ALL Major FOREIGN MARKETS
Password plasticdog77 User wiredbrain
Three measures of the nation's
money supply all rose sharply in the week ended Nov. 3, a period of extreme
turbulence in financial markets worldwide when money pulled out of stocks
may have been parked in banks or money market funds. Some of these funds
will go back into stocks.
NEW HIGH because of a drop in interest rates
due to a flight of money to US.. Germany , interest rates up in Europe
and down in USA -
Long
and short term rates are getting closer - narrows the yield curve -long
term down very close to 6 %, short 2 year up a little 5.7 %.
US long term bonds are best buy
-
The International Monetary Fund is revising down its
forecasts
for world economic growth as Asia's economies crumble under the sustained
impact of a deep financial crisis.
The Dec. 22 report will put 1998 economic
growth at 3.5 percent, down from 4.3 percent predicted just three months
ago.
The closely followed
World
Economic Outlook projects growth and inflation in developed and developing
states.
The September report forecast U.S. growth of 2.6 percent next year
and said the Japanese economy would grow by 2.1 percent.
The high 4.3 %
growth depended on Asia as Europe, Japan and US as mature economies have
much lower growth potential. US growth could be cut .5 % to 2.1 and Japan
to 1.5 %.
Basic trading strategy:
Since the direction of the market is down on fundamentals the most conformable
trade is when the market is up over 970 to 980 and starts down. When it
is down far enough below 930 it can go up again. We are close to a good
down again but the "end of year rally" means this is most likely to happen
in January.
The NDX is beter to trade as it moves with greater certainty
with less index options plays and lower premiums. It is well below the
adverage, fallen too much. Buy Dec 990 NDX put
.NDXXR at 3 5/8 and sell today on failed rally at about 10.
MAJOR
MARKETS:
Dealers noted a continuing push by cash-rich institutional investors
to inject funds into shares before year-end portfolio reviews.
"
There's so much cash out there that I see little encouragement for
the bears," said a trader at a top brokerage.
15:56 UNDERPERFORMERS: COMPUTER HARDWARE, ENVIRONMENTAL, GAMING, INTERNET.
15:54 OUTPERFORMERS: AIRLINES, BIOTECH, HEALTH CARE, SEMICONDUCTORS.
US STOCKS:
BRIDGE REPORTS:
site Information
BIG
CHART Wiredbrain charts end of a long term up cycle user "wiredbrain"
Long term
value of the US stock
market = EURO $ MAR98 94.15 = 1 -.9415 = 1/.0585
% = P/E = 17 vs. current value 20 ( or more ) = 17/20 = 15 % over valued
.85 x SP500 970 = 824 ROI base mark. - 120 points down from here. At 6
% P/E is 16 at 5 % P/E is 20 PLUS 5 % earning growth from GDP up 2.3 %
( 65 % of earning growth are foreign ) based on 4 % growth in Asia,
2.5 % productivity gains - 3 % growth increase in costs (wages).
Profits growth: 5 % from + 2.5 ( productivity ) + 2.3 ( GDP ) = 4.8
- 3.0 ( cost up) = 1.8 + 3.2 ( exports and foreign earnings) 825
x 1.05
= 866 as the "real" current
base value.
See how dependent US markets are on foreign sales and
interest rates.
The current
966
depends on a 10 % to 14 % growth in earning from GDP up 3.8 %, Foreign
markets up 6.5 % , costs flat ( down from materials and energy up from
labor) after productivity gains 3 % with little increase in prices. Possible
but not likely.
I still don't understand Friday (Dec. 5) - good
news is not good news,
does this
make
any sense ? No it didn't, the market responded this week to last
weeks news.
The weather pattern is very complex and uncertain. A real
chance of Korea default with serious results. Two large fronts have collided
in the last few days, the strong dollar, lower profits and interest rates
in a
-
CBS watch out! wildly wrong this morning try
Bloomberg-
who sometimes is wrong - need to check several places if something looks
funny.
After a noontime rally and seesaw afternoon the market drops like a
stone: Worry about higher interest rates, profits, exports ( down) and
imports (up) on weak YEN - Banking crisis in China - Japan has 400 billion
in bad debt and about the same in US bonds and assets, China about 40 %
of all bank loans are non performing, the trillions ( 1,000 billions )
of bad debts, weak banks, does make a problems in getting credit for new
activity, increased trade and higher profits in ONE WORLD ECONOMY !
OUR RECORD
site Information
TODAY
Market Monitor
U.S. STOCKS SEEN HURT AMID WAVE
OF EARNINGS WARNINGS.
Friday Dec. 12th just moved sideways. What doesn't go up, goes down.
Foreign Markets, bonds and money rates dollar mixed-
They were are all
in line Tuesday down and Wiredbrain was right on ! AGAIN on WED. and again
Thursday
BIG
CHART Wiredbrain charts
Market
Indications
Last Friday they were mixed ( Dec. 5) - we were way off ! We said down
and it went up because of magic, mob behavior and the madness of crowds,
fads and fancy: short covering and Technology is UP and is leading
the market.
.
The back side of a flight to quality - now
the money unwinds back to other places in Europe, Asia, Latin America making
US bonds and Stocks less attractive,
bust
may rise the most in a boom.
(
excellent article from Washington Post )
Editorial:
The Fed, the G-7 (11) have a HARD job - keeping a single economy stable
is hard enough - working in a interdependent global one is double tough
- with local domestic political forces working against you.
There are no
good choices - some less bad than others.
There has to be "easy money"
because tight money could cause a global financial crisis but easy
money causes inflation in a full employment market therefore: hold steady
- ( US has full employment, France and other countries are hurting
).
The "community of nations" now has a mature structure - Global Warming
is an example of how much progress we have made as a global family of nations
with the infrastructure to support complex relationships.
07:20 DOLLAR SURGES AGAINST YEN, UP 0.8% TO 130.75. down to 128 has
to expand trade gap - ( does any one care ? )
07:32 JAPAN'S RULING LDP HINTS AT US TREASURIES SALES.( see below)
07:43 RIVLIN: ASIAN CRISIS TO SLOW US GROWTH BY 0.5% IN 1998.
07:42 RIVLIN: US WAGES RISING, BUT NOT QUICKLY.
The BELIEF that cheap imports will hold down inflation is only half
true because it holds down profits as well which may cause a stock market
crisis and the loss of a trillion dollars in paper assets. Labor shortage
is a "skills" shortage created by neglect of "human capital", education
and infrastructure. Now we have a population that can't think rationally,
understand the basic facts of life, economics, or international trade and
science, technology or computer systems.
Market
Indications
Information transfer is a complex process - some people wait for the
"official" word.
IMF Warns
Asian Crisis Could Deepen
By Adam Entous
WASHINGTON (Reuters) -
The financial crisis in Asia could deepen and
spread in the months ahead, the International
Monetary Fund (IMF) warned on Saturday in a report urging developing
countries to brace against the economic fallout.
In its interim World Economic Outlook, the IMF slashed its combined
growth forecasts for Thailand, Indonesia, Malaysia and
the Philippines by a whopping 3.7 percentage points to 1.7 percent
for 1998, and said turmoil in Asia would dampen global
growth.
It predicted growth in Japan of only 1.1 percent in 1998, and said growth
in South Korea was expected to fall to 2.5 percent next year from 6.0 percent
this year.
Everyone can't quickly change their minds before information is sure
to be valid but then it maybe too late, some blend of quick turns and steady
hands are required or there would be even more chaos.
The
message
that growth in 1998 will be 2.5 % ( at best ) rather than 3.8 % is
slowly getting sunk into the minds of the market.
The Asian crisis will also have a negative impact on the American economy.
Estimates are that it will cut half a percentage point off the nation's
growth in 1998, putting it somewhere near 2.5 percent for the year, and
well below the fiery 4 percent pace of
growth for the past four quarters.
But while analysts have shaved fourth-quarter forecasts, few have done
their homework for the first quarter of 1998, which is
worrying some experts.
Analysts expect fourth-quarter profits for the Standard & Poor's
500 companies to rise 8.8 percent from a year earlier, on
average. Prior to the Asian economic mess, they had their sights set
on a jump of 12.2 percent, First Call said.
But the analysts still have high hopes for the first three months of
1998. Profits are projected to increase by a brisk 17.2 percent.
This means inflation is NOT a problem but deflation of prices and profits
is a problem. A slower Asia and somewhat slower US is made up by a slightly
faster Germany and EU. Asia has hit bottom and is on the mend, maybe better
than before because of required open market and political reforms.
The
idea of one world is not clear to most people as is the critical nature
of world trade. We are all in the same life boat - some of us just take
up more space than others.
The model industry is telecommunications - network computers - connected
by satellites, cables, DSL phones, wireless broadband, wide band further
creating a global intelengence system - something really NEW and different
- information replaces the transportation ( auto ) industry as the leading
indicator - People are still driving by looking in the rear view mirror
- a very dangerous process especially when going fast. see
packets.htm
In some service areas productivity gains of 25 % per year are possible
- Moore's law applies to many technologies - twice as much for half the
price in 1 1/2 years - communications will carry twice the load at half
the price by the middle of 1999, less than 50 % will be voice - telephone
type content - most will be digital - the internet will have 100 users,
representing 60 % of US buying power, soon and 200 million in 18 months
( global ), wireless phones will overtake wired phones by 2000, TV and
computers PC will converge as NC's and be the big new technology - like
TV in the 60's and PC in the 80"s as the engine of growth. 50 % of the
fortune 500 will be different in 25 years - global communications starts
now and will grow faster than light speed -
The real world is doing fine
- the "paper" tiger of money and finance is "out-of-control". see
image.htm
It said the Organization for Economic Cooperation and Development (OECD),
which groups the world's developed countries, would make the prediction
in a report to be released later this week.
Countries around Southeast Asia have faced crises in recent months
as stock prices tumbled and their
currencies lost value against the U.S. dollar.
The centre of the problems is South Korea where the International
Monetary Fund has mounted a 57
million dollar bail-out package to prevent economic collapse.
The Sunday Times said the OECD was set to predict that Japan
would be especially hard hit, with
growth that had been expected at more than three percent falling
to only half that.
But even in Europe and the United States, growth rates would
be shaved by 0.75 points by the Asian
crisis.
And, as the conditions worsen, some strategists have suggested that
Asia's currency turmoil and the resulting strength of the dollar will undoubtedly
affect U.S. companies with exposure abroad.
for earnings I think are still a little too
high.
They are expecting 8 percent earnings growth. I don't think we're
going to do that. For next year, they're expecting 14 percent earnings
growth. I think we'll be lucky to do half of that,"
More than 50 % of profit growth has to be in exports and earning
of overseas branches - I think forecasts are still a way too high and have
been !
U.S. STOCKS SEEN HURT AMID WAVE
OF EARNINGS WARNINGS.
MarketWatch
We are all in the same boat and rise and fall on the same
tides - just in different time zones.
12/18 01:00
YEAREND
- Slower U.S. growth to take toll on dollar
By Astrid Zweynert
LONDON, Dec 18 (Reuters)- Slower growth in the U.S. and recovering
European economies will take the steam out of a two-year uptrend in the
dollar next year, currency analysts say.
The weakness of the Japanese economy and the negative impact
of southeast Asian currency devaluations will allow the dollar to notch
up more gains against the yen. However, in the second half analysts expect
the yen to recover as Japan comes out of the doldrums.
Expectations that the German economic recovery will gather momentum,
meanwhile, will prop up the mark.
"Overall, it will be a year of recovering economies in Europe
and Japan and slower growth in the U.S., which is a reversal
of the dynamics that we have seen in the past two years," said Don Smith,
international economist at HSBC Markets.
Over much of the past two years the dollar benefited from U.S.
and German interest rate differentials moving heavily in favour of the
U.S. as the economy there enjoyed strong growth and low inflation.
Last summer that process started to reverse as markets reassessed
their views about economic recovery in Europe, and in Germany in
particular.
"
The authorities (would) rather have an export-led recovery
in Japan than no recovery at all," said Chris Furness, senior market strategist
at 4CAST.
On December 17, the Bank of Japan put steel into its efforts
to stem excessive yen weakness by selling dollars for yen for the first
time since 1992.
The intervention came after Japan announced a surprise
cut in personal income taxes in a bid to spur economic recovery.
U.S GROWTH TEMPERED BY DOLLAR'S IMPACT ON EXPORTS
In the U.S., growth will be tempered by the negative impact of
the strong dollar on exports. It typically takes about two years
for the full impact of currency strength to be felt.
Since 1995, the dollar has risen from a record low of 1.3430
marks to a near-eight year high of 1.8913 at the end of October
and from 79.70 yen in April 1995 to a 5-1/2 year high at 130.81 this
December.
U.S. growth is expected to slow from a fiery expected rate
of 3.8 percent to around 2.5 percent in 1998.
But in the developed world, Europe is the region least affected by financial
turmoil in Asia, and this expected to benefit the mark and European currencies
linked to it.
About nine percent of exports from the European Union go to
Asia, according to OECD data.
The
U.S. has a much larger share with
some 30 percent to the region.
However, part of the negative impact on growth is likely to be
offset by strong U.S. domestic demand, and on the positive side,
it might reduce inflationary pressures.
"
The European economies are the least affected by the fall-out
from Asia," said Keith Edmonds, chief analyst at IBJ International.
"As a result we expect the mark to be bid, in particular if the Bundesbank
decides to nudge up rates again."
The latest Merrill Lynch quarterly global investor survey supports
the positive mark view. It showed funds raised their exposure to
overweight in November from underweight in the previous quarter.
The global rate outlook depends heavily on whether the situation
in Asia stabilises and also -- in the U.S -- whether jobs growth
slows down, analysts said.
A tight labour market means the Federal Reserve keeps a close
watch for signs of emerging price pressures.
The Fed has kept rates on hold since March, when it raised the
key federal funds rate by a quarter point to 5.5 percent.
The Bundesbank
raised its repo rate to 3.30 percent from 3.00 percent in October.
One of the event risks on the list is the repatriation of funds
by Japanese investors towards the end of the first quarter when their
fiscal year ends, which typically boosts the yen.
A timely and broad start to European economic and monetary union (EMU)
with 11 founding members is almost a done deal for the markets.
Inflation in the euro-zone will be monitored with eagle eyes
by the independent European Central Bank, while its fiscal policy
will be constrained by the stability pact.
Also, Europe runs a significant current account surplus, while
the U.S. runs a deficit that is expected to widen in 1998.
The growing gap is a result of strong U.S. demand and the combined
effect of weaker domestic demand in Asia and Latin America and greater
competitiveness in Asia .
NEW
YORK (AP) -- U.S. Treasury securities fell Wednesday as the dollar
suffered its biggest decline in nearly seven years, reflecting crucial
steps by Japan to stimulate its economy and shore up the yen.
The price of the benchmark 30-year Treasury bond fell 9/16 point, or
$5.63 per $1,000 in face value. Its yield, which moves in the opposite
direction, rose to 6.00 percent from 5.96 percent late Tuesday.
Driving much of the action Wednesday was the decline in the dollar,
which at one point plunged nearly 6 yen from an intraday high of
131.53 before recouping some of its losses to settle at 127.08 yen, down
from 130.78 yen Tuesday.
Foreign investors steered their money away from dollar-denominated securities
such as Treasury bonds, which are hurt when the U.S. currency is weak,
and headed for healtheir investments in other overseas markets.
Have it both Ways:
A rebound in stocks should emerge after this week's sharp sell-off
led
by a technology sector that was rattled by companies forecasting
shortfalls in earnings due to Asia's turmoil.
Another slew of earnings warnings may be enough to tip the techs
back on a downward path.
"I think we will be ready to rally next week, and you also have positive,
year-end influences, but I don't see much upside here
because
enthusiasm will be tempered by continued uncertainty in Asia,"
said Michael Metz, chief investment strategist at Oppenheimer
& Co.
07:32 JAPAN'S RULING LDP HINTS AT US TREASURIES SALES.
If Japanese firms
repatriated
holdings of U.S. Treasury bonds to help cover losses at home it would
create a problem for Japan, not the United States, Massachusetts Institute
of Technology economist Rudiger Dornbusch said on Monday.
``It is not a problem for the U.S., it's a problem for Japan, because
if they want their money back, then our Treasury will hold interest rates
constant, that means we issue the money to pay the Japanese, as we issue
the money, the dollar goes down, the yen goes up and Japan will die,''
Dornbusch told Reuters Financial Television. ( Japan sells the dollars
for YEN lowering the price of dollars and raising the price of yen.
The
extra domestic dollars support growth and inflation, driving bond prices
down, interest up.
The fed can sell bond ( open market committee) to soak
up dollars to try to keep things steady. Fiscal policy with a sound federal
budget allows more fed monetary room to sale bonds to lower money supply,
than a few years ago. BUT 100 billion here and 100 billion there and you
are talking about some real money also lower bond prices means higher interest
and a lower stock market. .
While the Dow Jones industrial average has risen 25 percent this year,
the stock market in Thailand is down 71 percent (in
dollar terms); Singapore, 34 percent; the Philippines, 57 percent;
Japan, 25 percent; Korea, 55 percent. Of course, funds that have fallen
the most in a
(
excellent article from Washington Post )
Market Indications
Technology is what the auto industry used to be.
There was a time when auto sales and housing starts gave a clue to
the future of economic activity. Now Intel is the GM of yesterday and its
"Technology stocks fell amid a third straight
decline for semiconductor
issues Thursday. Meanwhile, Best Buy indicated that holiday electronics
sales will be strong."
The press will be watching employment numbers that
make a difference or people think they make a difference and perceptions
are a form of reality. People know employment is tight because of a poorly
educated work force but imports keep prices down.
A market is buyers who think the price is going up
and sellers who think the price is going down. Both can't be right
but hope and fear must be fairly even between buyers and sellers.
Therefore,
uncertainty is a necessary factor. When greed overtakes fear the market
goes up, when fear overtakes hope the market goes down. International computerized
traders still work on basic human emotions.
They have to do as well ( or
better ) than others and therefore markets are are reflective and reactive-
they are looking at what others are thinking and doing. So do we .....
The Wilshire Associates Equity Index -- which represents the combined
market value of all NYSE, American and Nasdaq
issues -- ended the week at $9.4 trillion, ( 1.3 of the GDP ) up $262.4
billion from last week. A year ago, the index stood at $7.168 trillion.
which was about 20 % of Global market value
of $35 trillion,
because of declines in Asia, the US market is now about 25 % of a global
market value of $38 trillion. (
The US is about 18 % of Gross Global Product
of 41 trillion, we are more capitalized ) That's why we don't want to pay
25% of the cost of the UN - we were almost 50 % of the global economy when
the rate was set in the 1950's. , down to 25 % in the 80's, 15 % in the
next decade
Market Indications
What
the
Fed said. First, rumors swirled that Johnson Smick International,
Inc., a Washington, D.C.- based advisory firm, told its clients that some
Fed economists believe Asian economic and financial problems would have
a bigger negative impact on U.S. economic growth in 1998 than has so far
been outlined in the Fed.'s public pronouncements.
some Fed economists believe the Asian turmoil could subtract
as much as 1.4 percent from 1998 U.S. GDP growth.
The USA can not remain unhurt by others loss - we can't
be richer when others are poorer -
Does this
08:34 RECORD 64% OF WORKING AGE AMERICANS EMPLOYED IN NOV.
The stock market is in pretty solid shape and it has
got
the right idea," said Russell Sheldon at the economic forecasting firm
McCarthy Crisanti Maffei Inc. "It sees bond interest rates dropping
lower in the next few weeks."
The spotlight was on a government report that unemployment was at
a 24 year low in November.
The jobless rate fell to 4.6 percent from
4.7 percent in October as a record number of Americans held jobs.
But what's good for Main Street may not necessarily be good for
Wall Street.
Financial markets reckoned that as the economy nears full
employment,
the risk of wage fed inflation will increase.
Planet 1, the world's first portable, global, personal satellite communications
system, will allow you to go beyond today's cellular/wireless boundaries
with seamless digital voice, fax, data and the portability you need.
Last Trade CQ 23 1/8 Change -3/16 (-0.80%) Prev Cls 23 5/16
End
of Year Bargains ?
`Tax-sensitive investors often sell their poor performers in order to
create tax losses to offset some of their capital gains.
In addition, many institutional investors try to dress up their portfolios
just before yearend by getting rid of stocks that have done badly. That
way, their mistakes won't show up in their annual reports, and they may
be able to avoid some embarrassing questions from clients.
``
These motives for selling have nothing to do with the actual
value of the stock, and they disappear on Dec. 31.
Therefore, we often
see already depressed stocks get pushed down even further in December,
only to bounce back fairly sharply after New Year's Day.''
TOP 5% in the Final Bell - user "wiredbrain" password "synergy" ATHM @home,
short Microsoft
Options
DAY TRADES .
Monday - not a day to trade premiums are high naturally
( some are a lot higher than others ) because of motion - best deal is
to sell both sides - What you want is an option that follows the market
and gives you as close to one to one as possible. It also need at least
50 open interest or you can't get in and out. If you are right and
there is a + 5 or - 5 you ant to get more than 1 1/2 points out of it !
Also 1 1/2 points on a 33 option is 4.5 % on a 12 option 12.5 % but on
a 3 option 50 %. That's why the NDX was good and maybe again-
Monday: Dec 22 nd
ORACLE:
OPTION OF THE DAY ORCL @ 21 5/8 ORQAD Jan 20 Call
2 1/2 looks like good buy to me -
OEX @ 450 is OK ( others are behaving badly - low ratio
of motion to price )
CALL OEXAJ 450 at 12 up to 15 1/ 4 + 1 1/
4
PUT OEXMJ 450 at 12
High 350 LOW 270
PSE TECH NDX
JAN
1998 CALLS 280 PSEAP Jan8 280.0 C 10 1/2 too much risk
JAN 1989
PUT 280 PSEMP 14 1/2 clearly a down preference premium too high
FRIDAY Ok bought on open and sold early 10:30 in and out
NDX at 966
NDXXL Dec 960 PUT NDXXL at 2 1/2 5 1/2 sold at
9
OEX at 454.52
OEXXK Dec 455 PUT at 3 - 4 sold at 6 ( close )
THURSDAY:
NDX at 983.63
Wed action: Dec 990 PUT .NDXXR at 3 3/8 at 10:30
SOLD at 11 1/2 ( Wed. Dec 17 )
Thurs: put DEC 980
(.NDXXP
) 7 5/8 BUY at 10:00 AM sold AT CLOSE
FOR 14 7/8
966.77 Change -16.8
NDX at 983.63 buy Jan 980 PUT .NDXMP at 31 1/4
Better is OEX at 460.50 down to 454.52 - 5.98
DEC 460 OEXXL put 3 1/2 BUY at 10:00 AM for 3
7/8 expires tomorrow
Sold at close for 6 3/4
TUES::
DEC call 980 (.NDXLP ) 16
$1600 UP to 18 1/2 $1850
Last Sale 23 3/ 4
NASDAQ 100 INDEX ($NDX) As of: Dec 16, 1997 @ 9:46 am ET Last 991.01
Change +6.63 % Change
+0.67% SOLD at 19 1/2
Dec 990 CALL .NDXLR 14 5/8
opened at 21 too late
AT 279.33 JAN CALL 280 (.PSEAP ) 10 7/ 8 11 1/ 2
JAN PUT 280 (.PSEMP ) 11 10 3/ 8 11
SPX
at 963.39
Call at Jan 960 SXBAL @ 32
Put at Jan 960 SXBML @ 22 1/2
WIREDBRAIN: We have been on the internet
for three years - before Yahoo,
Altavista, Excite
- Our job is to report the news in the
future.
We reported on the
communications, intranet,
cable modem ( or digital connection to replace the analog )s, DSL telephone,
satellites, before
they appear in the popular press. Once something is common knowledge (
cable modem ( or digital connection to replace the analog )s for example ) we drop the coverage and start on the next issue
- the Network satellite utility - a phone, a computer, a notebook, all
in one.
use wiredbrain and "any topic"GlobalVillage
Excite NewsSearch
Since 3/15/1995 ( about 100 per day - 50 % of actual count )
FastCounter
by LinkExchange
People still do not believe there
is only one world.
There is now only one large market with business and
capital moving freely. Global markets means the different exchanges are
part of one system moving with the time zones but linked together.
The
idea that you gain protection by spreading investments around in "foreign"
markets doesn't work. Major shares are traded 24 hours and are reflected
on the open of the US markets from actions taken elsewhere.
Thursday Dec 4th.
Three point landing
S&P 500 will open on the first bounce at 980 +3
+- 2 ( exact)
THEN it will take a midday leap of about
5 +- 3 point -( 50 pt. on the DJIA) near the old high of S&P 984 (Exact)
Share prices will end lower in seesaw trade, DOWN
5 +- 3 pt. .5 % to 973 (exact)
TUESDAY close of S&P 500 ^SPX 5:01PM 975.78 -6.59 -0.67
as
forecast: about the same as WED: all lined up including interest rates
up, dollar down, foreign markets down, technology down
WEDS. - Dec. 10th. the S&P 500 is expected
to: OPEN DOWN
open at 970 down -5 pt.. ( actual - 4.25 at
971 )
- 4 pt. on Foreign Markets -1.5 %/4 = .375
Frankfort, Paris and
London: Japan , South Korea, Hong Kong ,
Singapore
all down
ASIA
CURRENCIES down set the tone down
- 1 pt on dollar ( money flowing out )
down on the Mark 1.78
and the Yen 130 + to 128
+ 1.5 pt on bonds
+.3
%/2 = 07:31 30-YEAR US TREASURY OFF 9/32; YIELD AT 6.115.
- 3 Technology down - 1.3/4
= .- 3 pt. leading indicator
= - 6.5 to 969 to just above the 180 day moving average RIGHT
ON !
WED: S&P 500 ^SPX 5:01PM 969.79 -5.99 -0.61
Thus. Dec 11th
- 6.2 pt. on Foreign Markets -2.5 %/4 = .62
Stocks in London,
Paris and Frankfurt followed
Wednesday's
lackluster performance by registering losses of nearly two percent
at the opening after Tokyo and Hong Kong took a battering overnight.
The
Hang Seng sank 5.5 percent, the Nikkei 2.6 percent and Korean stocks 5.6
percent. Overnight, the Dow also slumped, finishing 70.87 points
down at 7,978.79. London's blue-chip FTSE index was down by as much as
1.7 percent in morning trade, dipping briefly below the psychologically
important 5,000 level before recovering somewhat.
DOWN BIG-
all down
-2. pt on dollar - .6 %/3 ( money flowing out, people selling US
assets, otherwise is really good for profits in dollars )
down on the
Mark
1.76 and the Yen 130 + to 128 DOLLAR UP ON
ASIA
CURRENCIES
.93/3 = + 3.25
pt on bonds 6.0% from 6.09 down from 6.115.
- 1.04 % .93
US CREDIT: Reasonable
volumes and strong price action marked the morning trade of Treasuries
in London as the market
became once again the world's bolt-hole, in the wake of further trauma
on Asian stock and currency markets.
Technology down - 1.7/4
= .- 4.25 pt. projected at 1007
actual at 1001
leading indicator NSDQ100 1033.21 Change -17.46 (-1.66%) Prev Cls 1050.67
Day's Range 1020.54 - 1050.67
= - 9.5 to 958. to under the 180 day moving
average (ACTUAL AT 955 )
08:31 NOV. JOB GAINS TWICE THE EXPECTATIONS.
The market was dragged down by a FALL in bond prices and jump in
interest rates,
went from 6.01 to - 6.16 but back
to 6.0 on the long bond.
The market
went
up because of strong technologies and the effects of futures and options
shifting positions.
07:24 INT'L REGULATORS PROBING MANIPULATION OF STOCK INDEXES: WSJ.
Foreign earning, more than 50 % of growth in profits are offshore,
are hurt by weak markets and a high
The rally has a thin gain/decline ratio
is almost even. Russell 2000 only up half as much as the DJIA.
ask for $SPX
http://cbs.marketwatch.com/data/marketdata.htx
People still do not believe there is only one world.
There
is now only one large market with business and capital moving freely. Global
markets means the different exchanges are part of one system moving with
the time zones but linked together.
The idea that you gain protection by
spreading investments around in "foreign" markets doesn't work. Major shares
are traded 24 hours and are reflected on the open of the US markets from
actions taken elsewhere.
EURO $ DEC97 94.20 or 5.8 % is
the base cost/return on money for other big business and large institutions.
When the bond prices go down the rate goes up. With money moving from stocks
to bonds, bond prices should go up and
BIG
CHART Wiredbrain charts
The US market is projected for tomorrow ( or later this morning)
to open up/down
based on foreign
markets,
CME flash
futures,
currencies
long
bond interest and
international bond
rates. Leading indicators include
high
tech and currencies in Asia.
ASIA
CURRENCIES down set the tone "Wiredbrain" is 90 % correct on the open,
80 % on the second bounce ( at 10:50 AM to noon ) and 70 % on the close
of the days trading. Our forecasts are like weather reports - they are
more accurate when BIG fronts and systems are clearly seen on the international
radar.
They are based on probabilities not solid physical models because
markets are
living systems, therefore, ordered
biological and organic systems feedback models work better. As in medicine
there is ART and skill and experience that goes into diagnoses and prognosis
of complex interactions. Markets are NOT a random walk but follow patterns
as Autopoiesis are self organizing, reproducing, evolving patterns of interactions
of Dissipative feedback loops within and among living things such as the
stock market, families and states.
"Humberto Maturana"
ask for $SPX
and ALL Major FOREIGN MARKETS
Password plasticdog77 User wiredbrain
Three measures of the nation's
money supply all rose sharply in the week ended Nov. 3, a period of extreme
turbulence in financial markets worldwide when money pulled out of stocks
may have been parked in banks or money market funds. Some of these funds
will go back into stocks.
NEW HIGH because of a drop in interest rates
due to a flight of money to US.. Germany , interest rates up in Europe
and down in USA -
Long
and short term rates are getting closer - narrows the yield curve -long
term down very close to 6 %, short 2 year up a little 5.7 %.
US long term bonds are best buy
-
(
excellent article from Washington Post )
NASDAQ 100 INDEX Nov. 21
1056.59 779.17 - 1153.89
^NDX
NSDQ100 DEC97 up to 1044 from 1033.00 future at
NSDQ100 1079.23 future to 1082.70 to 1052.07 to 1061.62
a leading index
MSN now does the best search