When the yield curve inverts and the averages close below their 200 day moving average, greed changes to fear and fear has NO price!

-- Jim (waiting@aol.com), January 28, 2000

Answers

Any idea on the time frame? Isn't this what happened in '29? Have tried to research the market profile from 29 and compare to now, to see what the correlations are. This inverted curve keeps coming up. Doesn't look real encouraging for a healthy economy.

-- suzy (suzy@nowhere.com), January 28, 2000.

If I followed the explanation on the other thread, the curve isn't exactly inverted, just more flattened, with the FARTHEST yields where they should be. Unless things have changed in the last couple days.

Night train

-- jes an ol pre-millions footballer, up to his arthritic hips in debt (nighttr@in.lane), January 28, 2000.

In 29, the crash was a shedding of near 50% of value in the relatively short time period of 6 months. In the next year and a half, an additional 40% of the 1929 value of the market as represented by the DOW was also shed.

This was the result.

The Great Depression has been incorrectly linked to the market failure. It rather resulted from the knee jerk reaction to the crash by the Fed governor's of the time. They restricted the flow of easy credit which had been a steadily increasing influence of the preceeding 14 years. The restraint of credit at the time of the popping of the speculative bubble of the stock market plunged the country into the following decade of turmoil.

Now though, we are being engineered into a 'soft landing'. Or so is the intent. So will we merely leak our balloon down to rational levels (a shedding of 50 to 90 % as in major devaluations)? Or are we truely in a bizarro world of a 'new economy' where usual things like the costs of the goods required to manufacture no longer matter as much as your digital presence?

If so, it is worth noting that the world is populated only with 'old economy' experts. By definition, if this is a 'new' economy then none of these guys has ever lived in or studied such a thing before.

This does not bode well.

Same thing we said about the smoke leaking out of Vesuvius. Oh well. Probably won't happen today.

-- pliney the younger (pliney@puget.sound), January 28, 2000.

The curve went inverted today by about 10 basis points. Deutsche and Morgan were heavy sellers in the interest market. I like the way this ugly bitch is looking. Time for a real wipeout.

To Night Train-----are you the famous Night Train Lane of NC Alpha circa '75?????

-- Lang (alprice@worldnet.att.net), January 29, 2000.

The only way a "soft landing" will happen is a massive infusion of more money (i.e. debt) to calm the fear. That spells inflation to me. Money supply grew 64% (annualized basis) last quarter. I would assume some of that needs to be retracted.

Besides, the bond market is far more important to the government than stock player's greed.

-- Jim (waiting@aol.com), January 29, 2000.

"massive infusion of more money (i.e. debt) to calm the fear."

That's why the Dorks-in-charge stress immigration of lots of debt free people, dumber the better. "Issue credit cards and let the debt role."

You/us dumb Americans are tapped out on debt and are therefore useless as consumers. per se!

-- Mark Hillyard (foster@inreach.com), January 29, 2000.