IMHO . . .

The stock market will "crash" when TPTB decide to let it crash. Until then, through whatever means possible, above and below board, whatever is necessary will be used to keep the bubble. I would also like to see more references to the averages of the various indicators, listed in percentages rather than in points. a 200 point loss in a 12000 point market, is hardly what was a 200 point drop in a 2000 point market.

Think about it - a 10% drop in this market would be over 1000 points. Yet a 500 point drop would be less than only a 5% drop - but would probably be thought of as a beginning of the end for civilized man.

"Watch the donut not the hole"; watch the percents not the points.

Robert

-- Same as B4 (NWphotog@Foxcomm.net), January 31, 2000

Answers

TPTB have no control over what people will do with their money. We have to look at the big picture, savings here in America is at an all time low and credit debt is at an all time high. People are borrowing money to invest in the stock market and when the chickens come home to roost, it will be a blood bath. Greedspin is about to raise the interest rates again to try and stop the madness of spending money that belongs to someone else. Greedspin kept it afloat for a while but the numbers are heading south. I'm staying out of the market, it's too risky for me.

-- bardou (bardou@baloney.com), January 31, 2000.

bubble.com is down 3.5% at 12:oo noon today.

If not a crash lets call it "a massive downward correction".

If, as is presumed, the FED raises interest rates this week by 1/4 to 1/2% it will have an affect on bond prices. Bond prices will drop to offer a competitive yield at higher interest. Bond prices move in proportion to the reciprical of the rate increase. Stock prices follow bond prices so as to keep dividend yields competitive with T- Bills and other bonds. EX:

A .5% rate increase from 6.5% to 7% is an increase in the cost of money of 7%. A $1000 bond at 6.5% pays $65, if rates go to 7% the value of the bond drops to $928.57 to remain competitive in the market.

A 7% increase in the cost of money will SLOW economic growth. Since bubble.com values are based on stories about future growth projections, any reduction in projected growth will negatively impact prices.

If bubble.com is to be based on fundementals like other stocks' P/E ratios then there could be a double digit downward correction. Some of us call that a "crash".

And the FED may not stop at 1/4 or 1/2% interest rate adjustment.

Besides, do you think the big industrials will let bubble.com takeover real assets ala AOL/Time Warner? TPTB have to let the air out of the bubble lest inflation drive up gold prices and force a derivatives squeeze on the major players. IMHO, Oil prices could be the inflationary factor beyond TPTB control which precipiates a squeeze and causes a CRASH on the NYSE/DJIA.

-- Bill P (porterwn@one.net), January 31, 2000.

Bill I gotta assume that you were referring to NASD because now (1300) it's only down about 2% and Dow is UP a few points and hasn't been down anywhere near that much.

Chuck

-- Chuck, a night driver (rienzoo@en.com), January 31, 2000.

Yes, I was taling NASDAQ. But what a volatile market:

Index Graphics

-- Bill P (porterwn@one.net), January 31, 2000.

Good bond explanation by BillP.

-- ..- (dit@dot.dash), January 31, 2000.

OK I will take the slow tumble down a hill - over what amount of time, though to do as much of a "correction" as some feel is necessary??

-- Same as b4 (Sameas@b.4), January 31, 2000.

Today, DJIA up 201 pts and NASDAQ up 53 pts.

If I were you I would not take investment advice from an amateur (me).

I am completely out of stocks waiting for the correction to buy back in. Who knows, maybe the whole market can be successfully managed by TPTB. I am a bit of a contrarian as I think sooner or later the bubble will come down. The questions are how far, how fast?

I look for a 20% correction or greater over next 3-6 weeks.

-- Bill P (porterwn@one.net), January 31, 2000.

If TPTB raised the cap gains rate to 90%, would that control what people do with their money?

-- JB (noway@jose.com), January 31, 2000.