Weatherman wrote: > > _________________________________________________________________________ > FishNet: Internet service for business and ministry http://www.fni.com/ > > ********************************************************* > Y2kWatch News - Information for Education and Preparation > --------------------------------------------------------- > Archive: http://y2kwatch.com/y2kman.htm October 20,1998 > ********************************************************* > > // Earnings are the Key // > by Bill Koenig > Koenig's International News > http://watch.org > > Two weeks ago when the markets were declining rapidly, I heard some of > the top Wall Street economists on CNBC discuss the likelihood of a > 6000 to 7000 Dow Jones average in the very near future. These experts > were convinced we were moving into or already in a bear market. > > Then, we received news that the Japanese government was injecting $500 > billion of taxpayer dollars into the ailing Japanese banking system, > and late last Thursday the Fed lowered the short-term lending rates > they charge to banks. These events contributed to a significant rally > in the markets. The economists started backtracking on their > predictions. Some economists are now being more vocal in their > opinions that we will not experience a recession next year. > > I remain skeptical. The US Savings and Loan crisis took 5 to 7 years > to fix in a rapidly improving economic market. It was smaller in > scope and magnitude than the Japanese problem. The Fed is clearly > worried about instability in the global economy and financial system. > The current deterioration of the global economic situation could > easily lead to a liquidity crisis that will have direct impact on > American and international businesses. > > It is time to be very cautious with our investments. If you're a > subscriber to the Y2kWatch News, you have a Y2k perspective many > people don't understand. Yes, you might be able to make some money in > the short term, but if you are risk averse, you might want to sit this > one out. Personally, even if I miss a last minute rally, I'd rather > have peace of mind. > > Below is the link to a very interesting article written by business > columnist Scott Burns of the Dallas Morning News. > > Earnings hold clues into future > http://www.dallasnews.com/business-columnists-nf/burns.htm > > --- > > // Y2k Weatherman Comments // > > Japan is essentially bankrupt, and the US can't (or won't) refloat the > Japanese banks with US Dollars. Japan will probably resort to > currency controls in order to recapitalize its banks, but this will > exacerbate the US trade deficit with Japan. If the US takes > protectionist measures to lessen the trade deficit damage, the tension > between the US and Japan will only increase. The dominoes are already > falling. > > Fed actions take at least 9 months to show up in the economy, so don't > fall for the false euphoria from the interest rate free fall. It is a > last ditch effort to prop up the global financial house of cards, a > veritable Ponzi scheme of debt. Lenders are still scared out of their > wits by what it is unfolding around the globe. The big players > understand hedge fund leverage and derivatives exposure and aren't as > likely to be drawn into the Fed's game. Unfortunately, this could > prompt additional rate cuts. > > As the credit crunch continues and corporate earnings continue to > deteriorate, the US stock market will again start to encounter plenty > of resistance. The rate cut euphoria will wear off. Also "bear" in > mind that an additional series of rate cuts will underscore the > seriousness of the deflation problem and contribute to dollar > weakness. This will have a very negative impact on global investor > psychology. A looser monetary policy might also portend an eventual > swing of the pendulum toward inflation. If Y2k produces a serious > drain on the world economy this could usher in the dreaded > "stagflation" reminiscent of the early 70s, inflation plus recession. > > The bottom line? Get prepared for Y2k now. Financial problems could > hit early. In fact, they are already here! We just haven't felt them > yet. > > The Y2k Weatherman > ©1998 by Y2kWatch.com > > == > ********************************************************* > Y2kWeatherman Page http://www.homestead.com/Y2kWeatherman > --------------------------------------------------------- > Let us all prepare to serve, not just prepare to survive! > --------------------------------------------------------- > Get the Y2kWatch News http://Y2kWatch.com/y2k-news.html > ********************************************************* > _________________________________________________________ > DO YOU YAHOO!? > Get your free @yahoo.com address at http://mail.yahoo.com > > _________________________________________________________________________ > To subscribe or unsubscribe by Web: http://y2kwatch.com/y2k-news.html > > To subscribe to the list send mail to y2k-news-request@y2kwatch.com > with no subject and a single body line: subscribe > To unsubscribe from the list send mail to y2k-news-request@y2kwatch.com > with no subject and a single body line: unsubscribe//////////////