From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #1224 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Friday, March 23 2001 Volume 02 : Number 1224 In this issue: Re: [CANSLIM] Cross posted - now Japan savings. Re: [CANSLIM] pasting stocks into clearstation Re: [CANSLIM] Capitulation Re: [CANSLIM] Cross posted - now Japan savings. [CANSLIM] Quick trot around the globe Re: [CANSLIM] Cross posted - now Japan savings. ---------------------------------------------------------------------- Date: Thu, 22 Mar 2001 22:20:36 -0800 From: "Bill Triffet" Subject: Re: [CANSLIM] Cross posted - now Japan savings. This post got me to thinking: What about Japan and their super low (or zero) interest rates now? I was under the impression that this is a country where the average citizen puts most of their monies into bank savings. If their prime lending rate is at zero, what are the banks paying to its customers? - -Bill Triffet - 100% cash now. - ----- Original Message ----- From: "Dan" To: Sent: Thursday, March 22, 2001 9:38 PM Subject: Re: [CANSLIM] Cross posted from another list > Tom, > > Thanks for the overview. I was mixing the Fed and the FOMC together, > not keeping or appreciating their different roles. > > As for savings, I doubt an educational program would have much of a > payoff. People just seem to spend at their comfort level with debt. I > do not really understand it any more as those days are far in my past. > What we need is a "war on debt", patterned after the successful and > economically sound "war on drugs". (:-))= > > Actually the poor saving habits of the citizenry that you mentioned and > I have read of of late surprised me a bit, as with all the money being > pumped into the market for the last few years, and evidently still going > in, although at a slower rate I assume, I just thought that there was a > higher rate of savings. > > Thanks for the response and the thoughts > > Dan > > Tom Worley wrote: > > > Hi Dan, > > > > The function of FOMC is to control the economy, and all aspects > > related to it. This is not the same as the Federal Reserve's > > responsibilities for liquidity. While Greenspan is two-hatted, > > he has a different mission in each area. > > > > The Federal Reserve, not FOMC, establishes margin requirements on > > stocks. Because of the high volatility on most dot com stocks, > > over the past two years most firms increased the margin > > requirements for them above the minimums set by the Fed Reserve. > > I suspect this action was sufficient for the Fed Reserve to feel > > it did not need to intervene further. > > > > One thing that was most clear last Tuesday is that Mr. G > > recognizes that his role is to manage the economy, not the stock > > market. Had he been attempting to control the stock market, and > > re-establish the wealth effect, then he would have insisted on a > > cut of at least 75 BP, and maybe even a full %. Of course, had he > > done a full %, and maybe even 75 BP, the airhead commentators > > would have focused on how bad things must be, and only the Feds > > realize it. > > > > Frankly, I am at a loss to come up with any suggestions on how to > > improve the personal spending habits, and savings habits, of > > citizens in a free country. Perhaps a public education program, > > such as has been done on the issue of smoking or drug abuse. The > > citizens of the USA are among the worst for saving money in the > > world. Presently the rate is negative. It's one reason I maintain > > a long term position in a company selling software to bankruptcy > > trustees. Bankruptcy is a solid growth industry, that only gets > > better in bad economic times. But it did well even in the good > > times. However, this is not the function or responsibility of > > FOMC. Had they raised rates to "punish" those abusing their > > credit, they would also have punished corporations and > > individuals using credit responsibly. And, of course, they would > > have stifled economic growth years ago, contrary to their mandate > > to manage. > > > > The process is usually self correcting, either thru personal > > bankruptcy, or thru outrage at the interest rates being paid on > > credit cards. We saw both about three years ago, when rates were > > around 17 or 18%. People just started cutting up the cards, and > > paying off the balances. We still see this today at financial > > sites like Motley Fool, where they exhort people to pay off high > > interest debt before thinking about investing. After all, it's a > > guaranteed return even now of about 12%, and that's pretty > > attractive. > > > > Mr. G was sharply criticized when he tried to "jawbone" the > > bubble out of dot coms and techs stocks with his famous > > "euphoria" comment. Kinda funny now that the commentators > > criticize him for failing to control the bubble, when that is not > > even his responsibility. Where's the media's responsibility in > > all this, they were the ones telling new investors to put money > > into the market and make a profit, to listen to some, it was > > practically assured. Two years ago, at the height of the dot com > > bubble, I don't recall any analysts or market commentators > > warning that these companies were all start ups, limited > > management experience, no earnings and only minor revenues (look > > at ETYS for just one monstrous example, went public with a market > > cap greater than ToysRUs, and now bankrupt). But it's easier for > > the media to blame a govt employee, than to accept any social > > responsibility for themselves. > > > > The stock market is first and foremost a "free market". It should > > not, and cannot, be controlled by an individual or a govt agency. > > It must correct itself. Part of that process is ongoing, but so > > long as we are wedded to vested interests (media commentators are > > there to shock and attract viewers in order to sell advertising > > time, wirehouse analysts are there to generate activity and > > protect the interests of the wirehouse, wirehouses downgrading a > > stock to a "hold" when what they really mean is "dump that dog as > > fast as you can enter the sell order"), even reasonably respected > > journals such as WSJ or IBD must still sell ad space to survive. > > I remember the early days of IBD (then Investors Daily) when > > there was virtually no ads, and never an ad from a company that > > might be a competitor (e.g. stock screening services, investment > > letters, brokerage houses, etc). It's quite different now that > > they have built up a subscriber base, and must generate revenues > > to cover costs. > > > > It's a harsh world in the stock market, but there will always be > > investors (including institutional money managers) who are > > willing to park money in a speculative stock in the belief / > > expectation that it will make a profit "someday" (e.g. Amazon, > > how many years now have we been promised profits?). The beauty of > > CANSLIM is that you can combine what a company is really > > achieving (fundamentals) with what the market is thinking > > (momentum) and make money off the combination. > > > > Let's not blame Mr. G for what is going on right now. He, and > > FOMC, are after all only human, and they are trying to anticipate > > and project what will happen economically many months in the > > future. There are many factors far beyond their control, > > including consumer spending and debt levels, but also things like > > oil production quotas and pricing, that are beyond both their > > control and predictability. > > > > Tom Worley > > stkguru@netside.net > > ICQ # 5568838 > > > > ----- Original Message ----- > > From: Dan > > To: > > Sent: Wednesday, March 21, 2001 11:36 PM > > Subject: [CANSLIM] Cross posted from another list > > > > I wish I was more knowledgeable of Economics to be able to better > > put > > this in some frame of reference generally . Specifically, about > > midway > > down the column, he speaks of three areas of failures by the Fed. > > One I > > wonder about is the failure to squelch the internet, tech, > > bubble. This > > seems to me, to be outside the purview and responsibilities of > > the Fed. > > > > Anyone have thoughts about the article? > > > > --------------------------------------------------- > > http://www.thestreet.com/p/comment/galbraith/1354492.html > > > > It's Too Late Now > > By James K. Galbraith > > Special to TheStreet.com > > 3/21/01 12:41 PM ET > > > > Let me confess to minor sympathy for Brother Greenspan. There was > > nothing he could have done Tuesday to stop the onrushing slump. > > The > > pathetic action he took was merely a shrug, a sigh of resignation > > and > > impotence. > > > > If you doubt this, ask yourself: Suppose the cut had been 75 > > basis > > points? Do you think that would have sparked a rally? Do you > > really > > believe that the distance separating a slump from a rally was 25 > > lousy basis points? Or rather, to be precise, that it was the > > difference between 25 basis points now and the same 25 basis > > points > > in two or three weeks? Of course not. > > > > Next, suppose the cuts had been, say, 100 basis points or more. > > Would > > the markets have shouted hallelujah then? Would such a cut have > > jump- > > started consumer confidence? Would it have revived the tech > > sector? > > Or would we have inferred that the news reaching the Fed is worse > > than we knew? > > > > The point is, it's too late. > > > > This slump has three deep causes. The first is the build-up of > > private debts, mainly households, to new highs. The second was > > the > > tech bubble, fueled in part by capital inflow, funneled into one > > narrow sector of the markets. Third, let's be candid, was the > > last > > administration's single-minded pursuit of public debt > > reduction -- a > > goal achievable in a growing economy only if private debts are > > going > > up very fast. > > > > The Fed failed to take any steps to control these developments. > > It > > failed to discourage excessive household borrowing, particularly > > unsecured credits. It failed miserably to squelch the Nasdaq > > bubble, > > which it could have done on its own authority by raising the > > margin > > requirement. It went along with the debt reduction charade -- > > until > > just as cravenly switching over to the tax reduction charade last > > month. And it attacked the debt pile-up at the most vulnerable > > point > > in 1999-2000, by jacking up interest rates in what it said -- > > incredibly -- was a defense against inflation! > > > > When households reach historic limits of debt carriage -- and > > interest rates rise -- they tend to stop borrowing. When a stock > > bubble pops, the firms feeding on it run out of money after a > > while. > > These things have happened. Now, they must run their course. > > > > We will need to wait until cars and appliances age, until people > > have > > weddings, children, divorces, or deaths in the family, and decide > > to > > move to new houses. Only then -- a year or more from now -- will > > the > > urge to borrow return. Then, a cut in interest rates might do > > something. > > > > In the meantime, hold on to your hats. > > > > ----------------------------------------------------------------- > > -- > > James K. Galbraith is author of Created Unequal: The Crisis in > > American Pay (Free Press, 1998) and director of the University of > > Texas Inequality Project. A professor at the University of Texas > > at > > Austin and senior scholar at the Levy Economics Institute, he > > worked > > for many years on the staff of the House Banking Committee, where > > he > > conducted oversight of the Federal Reserve. He welcomes your > > feedback > > and invites you to send it to James K. Galbraith . > > > > -- > > Dan > > > > http://www.globexplorer.com/cfviewer/start.cfm > > > > http://www.corazon.org/ > > > > - > > > > - > > -- > Dan > > http://www.globexplorer.com/cfviewer/start.cfm > > http://www.corazon.org/ > > > > - > - - ------------------------------ Date: Thu, 22 Mar 2001 22:54:34 -0800 From: "Perry Stanfield" Subject: Re: [CANSLIM] pasting stocks into clearstation Tim, how do you work your shortcut keys to paste symbols?? Perry - ----- Original Message ----- From: "Tim Fisher" To: Sent: Wednesday, March 21, 2001 6:12 AM Subject: Re: [CANSLIM] pasting stocks into clearstation > That's what I do, takes a minute, seems easier than all that > concatenating...shortcut keys are e-s-e (yeah I do it a lot!) > > At 10:42 PM 3/20/2001 -0800, you wrote: > >Another poster in clearstation offered another approach.......Pasting to > >another worksheet using paste special, transpose checked, then saving as a > >csv (comma delimited) file to notepad, then pasting to clearstation. I > >zipped 70 of Tim's HGS screened stocks into a clearstation portfolio in a > >minute using this, and was scanning charts to my heart's content very quickly. > > > > Tim Fisher, 1995 President, Pacific Fishery Biologists > Ore-ROCK-On Rockhounding Web Site > PFB Information > mailto:tim@OreRockOn.com > WWW http://OreRockOn.com > > > - > - - ------------------------------ Date: Fri, 23 Mar 2001 05:48:23 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] Capitulation Hi Tamas, No, I do not expect to see events such as we saw in 1987. I will give you a real life story from then. A broker I know bought Disney in the midst of the 22% crash on Monday. Back then, settlement was five days. He sold for a nice profit three days later. When he sold, he still had not gotten confirmation of his purchase, that is how far behind everything was. There are many differences from then to now. This includes online trading now, permitting many people from the investor to stock brokers to enter the order into electronic form. Today you have live updating of portfolios, back then you only had prior day information, and then only if the system was fully updated. Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Makara, Tamas To: Sent: Thursday, March 22, 2001 8:20 PM Subject: Re: [CANSLIM] Capitulation Tom, Thank you for your reply. So, you say the events of 1987 won't be repeated. I hope so. : )) /As far as I know Wednesday afternoon of the black week of 1987 (two days AFTER -22% Monday) trading had been halted in a number of important NYSE stocks. If something, that was a capitulation day. I wasn't an active investor then, but that's what I have read. Actually, Mamis has another example: the day the famous Nixon plan was announced in the seventies, several stocks, GM for example, couldn't be opened until next day because everybody wanted to buy. And that was a good time to sell./ Tamas Tom Worley wrote: > The job of a floor specialist is to be able to match buy and sell > orders. Should he have more orders on one side than another, > then he must balance the difference from his own personal > account. If he fails to do this (e.g. a stock is tanking and he > doesn't want to bear the loss of personally buying the stock from > the sellers), then normally he will lose the assignment of that > stock, and face stiff fines as well. > > The function and responsibility of a floor specialist is to > "maintain an orderly market". Within that, he must provide > liquidity. It's a high risk situation that people actually > compete and pay money for! > > Trading in a particular stock is normally only halted during the > trading day if requested by the company (typically because they > know they have major news coming), by the Exchange or the > regulators because they are suspicious of trading patterns they > see, possibly from insider trading, and for a ''crossed market" > where the bid is equal to or higher than the offer (bid went up > or offer went down). This latter case usually only lasts a few > seconds to a minute or two. > > At any given moment you can have trading imbalances on a > particular stock. But when you talk capitulation, you must be > talking of a market wide occurrence if you want to use trading > halts or late tape as a criteria. I just don't see that happening > with present technology. > > With the increased exposure of trading of NYSE stocks "off > exchange", the market becomes more like NASDAQ where you can have > 15 or 20 different regional exchanges / firms all bidding (or > offering) a stock in competition with the floor specialist. > > Tom Worley > stkguru@netside.net > ICQ # 5568838 > > ----- Original Message ----- > From: Makara, Tamas > To: > Sent: Thursday, March 22, 2001 7:21 PM > Subject: Re: [CANSLIM] Capitulation > > Tom, > > I suppose the late tape belongs to the past. But wouldn't there > be a > trading halt in an NYSE stock if the market maker had market sell > orders > far outnumbering the bids? (Delayed openings happen for the same > reason.) > > Tamas > > Tom Worley wrote: > > > Both Naz and NYSE have upgraded their technology to handle > > multi-billion share trading days (Naz can already handle 3 bil > > share days) so using late tape, and trading halts, as an > > indicator is history, at least for any reliability. Delayed > > openings still occur on NYSE, AMEX primarily when there is > major > > news on a specific stock. But that as an indicator for listed > > securities across the board is also pretty much history. > > > > Capitulation and fear go hand in hand. When the fear quotient > is > > not high enough, and I think that's the case now, then it's > more > > of the "wear 'em out" than panic selling. > > > > I do note that the declines on virtually every European markets > > today was far worse than I can recall in the past year. And the > 4 > > week average Jobless Claims is the highest in nearly five > years. > > The Index of Leading Economic Indicators slipped further (down > 4 > > of the past 5 months). Not yet a recession, but heading that > way. > > Daimler Chrysler burned thru $10 billion of its $11 billion > cash > > in the past year, $5 billion in 5 months alone. Blames it all > on > > Chrysler problems. Bad news abounds. > > > > And, of course, the DOW 30 Industrials passed into official > BEAR > > territory today, the last major index to do so. So now it > doesn't > > matter which index you trust, they're all bears. > > > > But there does seem to be a sense that Naz in general, and > techs > > in particular, have fallen so far that they "must" be at or > near > > the bottom. I am not plugging any money back into the market > > until I see another day or so of behavior, at a minimum. > > > > Tom Worley > > stkguru@netside.net > > ICQ # 5568838 > > > > ----- Original Message ----- > > From: Makara, Tamas > > To: > > Sent: Thursday, March 22, 2001 4:15 PM > > Subject: Re: [CANSLIM] Capitulation > > > > According to Justin Mamis, the best signs of a capitulation day > > are (or used > > to be): late tape, flash quotes due to the lateness of the > tape, > > delayed > > openings and trading halts due to the imbalance of buying and > > selling. And > > of course, extreme volume. What is extreme volume? If you have > to > > ask, it is > > not extreme yet. > > > > Also, from what I have read about market history, it is not > > always necessary > > to have a capitulation day. For example, final phases of > primary > > downtrends > > are usually characterized by low volume, low volatility, and a > > total lack of > > public interest in the market -- not by capitulation. > > > > Anyway, what canslimers need is an abundance of good leadership > > stocks > > breaking out of sound bases and following through to the > upside. > > This has > > nothing to do with capitulation days. > > > > Tamas > > > > Tim Fisher wrote: > > > > > AFAIK it is conventional wisdom. I no of no one who has > > backtested the > > > relationship, let alone defined what "capitulation" and > "panic > > selling" > > > mean in terms of volatility, percent declines, volume, etc. > > > > > > BTW the following URL has some entertaining, but not > > necessarily useful, > > > definitions of many market terms: > > > http://investopedia.com/categories/buzzwords.asp > > > > > > On 01:07 PM 3/22/01, Steve F Said: > > > > > > >Is it an absolute that there must be a 'capitulation' > > > >before the market bottoms out. Couldn't one describe > > > >what has been going on as a 'capitulation'. It seems > > > >to me that the funds are flush with money, and once we > > > >get past these few weeks of selling to pay income tax, > > > >the selling just might dry up. I do not expect to see > > > >a big bounce in the near future but I am hoping to see > > > >some stablity. > > > > > > > >Am I kidding myself? > > > > > > > >__________________________________________________ > > > >Do You Yahoo!? > > > >Get email at your own domain with Yahoo! Mail. > > > >http://personal.mail.yahoo.com/ > > > > > > > >- > > > > > > Tim Fisher > > > Ore-Rock-On and Pacific Fishery Biologists WWW Sites > > > > > > Tim@OreRockOn.com > > > WWW: http://OreRockOn.com > > > See naked fish and rocks! > > > > > > - > > > > - > > > > - > > - > > - - - - - ------------------------------ Date: Fri, 23 Mar 2001 05:55:19 -0500 From: "Tom Worley" Subject: Re: [CANSLIM] Cross posted - now Japan savings. Hi Bill, I have heard stories that the Japanese have a distrust of their banks, and often hoard money at home, or put it into gold or other valuables that do not pay interest. So they may be used to not getting any income from their savings. I believe the everyday citizen has become more of a stock market investor than was the case ten years ago, as well. Tom Worley stkguru@netside.net ICQ # 5568838 - ----- Original Message ----- From: Bill Triffet To: Sent: Friday, March 23, 2001 1:20 AM Subject: Re: [CANSLIM] Cross posted - now Japan savings. This post got me to thinking: What about Japan and their super low (or zero) interest rates now? I was under the impression that this is a country where the average citizen puts most of their monies into bank savings. If their prime lending rate is at zero, what are the banks paying to its customers? - -Bill Triffet - 100% cash now. - ----- Original Message ----- From: "Dan" To: Sent: Thursday, March 22, 2001 9:38 PM Subject: Re: [CANSLIM] Cross posted from another list > Tom, > > Thanks for the overview. I was mixing the Fed and the FOMC together, > not keeping or appreciating their different roles. > > As for savings, I doubt an educational program would have much of a > payoff. People just seem to spend at their comfort level with debt. I > do not really understand it any more as those days are far in my past. > What we need is a "war on debt", patterned after the successful and > economically sound "war on drugs". (:-))= > > Actually the poor saving habits of the citizenry that you mentioned and > I have read of of late surprised me a bit, as with all the money being > pumped into the market for the last few years, and evidently still going > in, although at a slower rate I assume, I just thought that there was a > higher rate of savings. > > Thanks for the response and the thoughts > > Dan > > Tom Worley wrote: > > > Hi Dan, > > > > The function of FOMC is to control the economy, and all aspects > > related to it. This is not the same as the Federal Reserve's > > responsibilities for liquidity. While Greenspan is two-hatted, > > he has a different mission in each area. > > > > The Federal Reserve, not FOMC, establishes margin requirements on > > stocks. Because of the high volatility on most dot com stocks, > > over the past two years most firms increased the margin > > requirements for them above the minimums set by the Fed Reserve. > > I suspect this action was sufficient for the Fed Reserve to feel > > it did not need to intervene further. > > > > One thing that was most clear last Tuesday is that Mr. G > > recognizes that his role is to manage the economy, not the stock > > market. Had he been attempting to control the stock market, and > > re-establish the wealth effect, then he would have insisted on a > > cut of at least 75 BP, and maybe even a full %. Of course, had he > > done a full %, and maybe even 75 BP, the airhead commentators > > would have focused on how bad things must be, and only the Feds > > realize it. > > > > Frankly, I am at a loss to come up with any suggestions on how to > > improve the personal spending habits, and savings habits, of > > citizens in a free country. Perhaps a public education program, > > such as has been done on the issue of smoking or drug abuse. The > > citizens of the USA are among the worst for saving money in the > > world. Presently the rate is negative. It's one reason I maintain > > a long term position in a company selling software to bankruptcy > > trustees. Bankruptcy is a solid growth industry, that only gets > > better in bad economic times. But it did well even in the good > > times. However, this is not the function or responsibility of > > FOMC. Had they raised rates to "punish" those abusing their > > credit, they would also have punished corporations and > > individuals using credit responsibly. And, of course, they would > > have stifled economic growth years ago, contrary to their mandate > > to manage. > > > > The process is usually self correcting, either thru personal > > bankruptcy, or thru outrage at the interest rates being paid on > > credit cards. We saw both about three years ago, when rates were > > around 17 or 18%. People just started cutting up the cards, and > > paying off the balances. We still see this today at financial > > sites like Motley Fool, where they exhort people to pay off high > > interest debt before thinking about investing. After all, it's a > > guaranteed return even now of about 12%, and that's pretty > > attractive. > > > > Mr. G was sharply criticized when he tried to "jawbone" the > > bubble out of dot coms and techs stocks with his famous > > "euphoria" comment. Kinda funny now that the commentators > > criticize him for failing to control the bubble, when that is not > > even his responsibility. Where's the media's responsibility in > > all this, they were the ones telling new investors to put money > > into the market and make a profit, to listen to some, it was > > practically assured. Two years ago, at the height of the dot com > > bubble, I don't recall any analysts or market commentators > > warning that these companies were all start ups, limited > > management experience, no earnings and only minor revenues (look > > at ETYS for just one monstrous example, went public with a market > > cap greater than ToysRUs, and now bankrupt). But it's easier for > > the media to blame a govt employee, than to accept any social > > responsibility for themselves. > > > > The stock market is first and foremost a "free market". It should > > not, and cannot, be controlled by an individual or a govt agency. > > It must correct itself. Part of that process is ongoing, but so > > long as we are wedded to vested interests (media commentators are > > there to shock and attract viewers in order to sell advertising > > time, wirehouse analysts are there to generate activity and > > protect the interests of the wirehouse, wirehouses downgrading a > > stock to a "hold" when what they really mean is "dump that dog as > > fast as you can enter the sell order"), even reasonably respected > > journals such as WSJ or IBD must still sell ad space to survive. > > I remember the early days of IBD (then Investors Daily) when > > there was virtually no ads, and never an ad from a company that > > might be a competitor (e.g. stock screening services, investment > > letters, brokerage houses, etc). It's quite different now that > > they have built up a subscriber base, and must generate revenues > > to cover costs. > > > > It's a harsh world in the stock market, but there will always be > > investors (including institutional money managers) who are > > willing to park money in a speculative stock in the belief / > > expectation that it will make a profit "someday" (e.g. Amazon, > > how many years now have we been promised profits?). The beauty of > > CANSLIM is that you can combine what a company is really > > achieving (fundamentals) with what the market is thinking > > (momentum) and make money off the combination. > > > > Let's not blame Mr. G for what is going on right now. He, and > > FOMC, are after all only human, and they are trying to anticipate > > and project what will happen economically many months in the > > future. There are many factors far beyond their control, > > including consumer spending and debt levels, but also things like > > oil production quotas and pricing, that are beyond both their > > control and predictability. > > > > Tom Worley > > stkguru@netside.net > > ICQ # 5568838 > > > > ----- Original Message ----- > > From: Dan > > To: > > Sent: Wednesday, March 21, 2001 11:36 PM > > Subject: [CANSLIM] Cross posted from another list > > > > I wish I was more knowledgeable of Economics to be able to better > > put > > this in some frame of reference generally . Specifically, about > > midway > > down the column, he speaks of three areas of failures by the Fed. > > One I > > wonder about is the failure to squelch the internet, tech, > > bubble. This > > seems to me, to be outside the purview and responsibilities of > > the Fed. > > > > Anyone have thoughts about the article? > > > > --------------------------------------------------- > > http://www.thestreet.com/p/comment/galbraith/1354492.html > > > > It's Too Late Now > > By James K. Galbraith > > Special to TheStreet.com > > 3/21/01 12:41 PM ET > > > > Let me confess to minor sympathy for Brother Greenspan. There was > > nothing he could have done Tuesday to stop the onrushing slump. > > The > > pathetic action he took was merely a shrug, a sigh of resignation > > and > > impotence. > > > > If you doubt this, ask yourself: Suppose the cut had been 75 > > basis > > points? Do you think that would have sparked a rally? Do you > > really > > believe that the distance separating a slump from a rally was 25 > > lousy basis points? Or rather, to be precise, that it was the > > difference between 25 basis points now and the same 25 basis > > points > > in two or three weeks? Of course not. > > > > Next, suppose the cuts had been, say, 100 basis points or more. > > Would > > the markets have shouted hallelujah then? Would such a cut have > > jump- > > started consumer confidence? Would it have revived the tech > > sector? > > Or would we have inferred that the news reaching the Fed is worse > > than we knew? > > > > The point is, it's too late. > > > > This slump has three deep causes. The first is the build-up of > > private debts, mainly households, to new highs. The second was > > the > > tech bubble, fueled in part by capital inflow, funneled into one > > narrow sector of the markets. Third, let's be candid, was the > > last > > administration's single-minded pursuit of public debt > > reduction -- a > > goal achievable in a growing economy only if private debts are > > going > > up very fast. > > > > The Fed failed to take any steps to control these developments. > > It > > failed to discourage excessive household borrowing, particularly > > unsecured credits. It failed miserably to squelch the Nasdaq > > bubble, > > which it could have done on its own authority by raising the > > margin > > requirement. It went along with the debt reduction charade -- > > until > > just as cravenly switching over to the tax reduction charade last > > month. And it attacked the debt pile-up at the most vulnerable > > point > > in 1999-2000, by jacking up interest rates in what it said -- > > incredibly -- was a defense against inflation! > > > > When households reach historic limits of debt carriage -- and > > interest rates rise -- they tend to stop borrowing. When a stock > > bubble pops, the firms feeding on it run out of money after a > > while. > > These things have happened. Now, they must run their course. > > > > We will need to wait until cars and appliances age, until people > > have > > weddings, children, divorces, or deaths in the family, and decide > > to > > move to new houses. Only then -- a year or more from now -- will > > the > > urge to borrow return. Then, a cut in interest rates might do > > something. > > > > In the meantime, hold on to your hats. > > > > --------------------------------------------------------------- - -- > > -- > > James K. Galbraith is author of Created Unequal: The Crisis in > > American Pay (Free Press, 1998) and director of the University of > > Texas Inequality Project. A professor at the University of Texas > > at > > Austin and senior scholar at the Levy Economics Institute, he > > worked > > for many years on the staff of the House Banking Committee, where > > he > > conducted oversight of the Federal Reserve. He welcomes your > > feedback > > and invites you to send it to James K. Galbraith . > > > > -- > > Dan > > > > http://www.globexplorer.com/cfviewer/start.cfm > > > > http://www.corazon.org/ > > > > - > > > > - > > -- > Dan > > http://www.globexplorer.com/cfviewer/start.cfm > > http://www.corazon.org/ > > > > - > - - - - ------------------------------ Date: Fri, 23 Mar 2001 06:59:37 -0500 From: "Tom Worley" Subject: [CANSLIM] Quick trot around the globe This is a multi-part message in MIME format. - ------=_NextPart_000_000E_01C0B366.D3BA1E40 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Looks like most major exchanges in Asia did OK with the exception of = Hong Kong, down 0.3%. Japan was up 2.8%. In Europe, most of yesterday's large losses are being recovered, most = exchanges up a percent or more. NYSE futures up a percent +, and Naz futures now up over 3%. The stampede in Nasdaq may be on. We should now be counting for our Day = 4-7 Follow Thru (FT) event. I wouldn't mind 4 straight days up over 1%, = however. Tom Worley stkguru@netside.net ICQ # 5568838 - ------=_NextPart_000_000E_01C0B366.D3BA1E40 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Looks like most major exchanges in Asia did OK with = the=20 exception of Hong Kong, down 0.3%. Japan was up 2.8%.
 
In Europe, most of yesterday's large losses are = being=20 recovered, most exchanges up a percent or more.
 
NYSE futures up a percent +, and Naz futures now up = over=20 3%.
 
The stampede in Nasdaq may be on. We should now be = counting=20 for our Day 4-7 Follow Thru (FT) event. I wouldn't mind 4 straight days = up over=20 1%, however.

Tom Worley
stkguru@netside.net
ICQ #=20 5568838
 
 
- ------=_NextPart_000_000E_01C0B366.D3BA1E40-- - - ------------------------------ Date: Fri, 23 Mar 2001 04:49:59 -0800 (PST) From: Kent Norman Subject: Re: [CANSLIM] Cross posted - now Japan savings. Perhaps they are invested out of the country? Kent Norman - --- Bill Triffet wrote: > This post got me to thinking: What about Japan and > their super low (or zero) > interest rates now? I was under the impression that > this is a country where > the average citizen puts most of their monies into > bank savings. If their > prime lending rate is at zero, what are the banks > paying to its customers? > > -Bill Triffet - 100% cash now. > > > ----- Original Message ----- > From: "Dan" > To: > Sent: Thursday, March 22, 2001 9:38 PM > Subject: Re: [CANSLIM] Cross posted from another > list > > > > Tom, > > > > Thanks for the overview. I was mixing the Fed and > the FOMC together, > > not keeping or appreciating their different roles. > > > > As for savings, I doubt an educational program > would have much of a > > payoff. People just seem to spend at their > comfort level with debt. I > > do not really understand it any more as those days > are far in my past. > > What we need is a "war on debt", patterned after > the successful and > > economically sound "war on drugs". (:-))= > > > > Actually the poor saving habits of the citizenry > that you mentioned and > > I have read of of late surprised me a bit, as with > all the money being > > pumped into the market for the last few years, and > evidently still going > > in, although at a slower rate I assume, I just > thought that there was a > > higher rate of savings. > > > > Thanks for the response and the thoughts > > > > Dan > > > > Tom Worley wrote: > > > > > Hi Dan, > > > > > > The function of FOMC is to control the economy, > and all aspects > > > related to it. This is not the same as the > Federal Reserve's > > > responsibilities for liquidity. While Greenspan > is two-hatted, > > > he has a different mission in each area. > > > > > > The Federal Reserve, not FOMC, establishes > margin requirements on > > > stocks. Because of the high volatility on most > dot com stocks, > > > over the past two years most firms increased the > margin > > > requirements for them above the minimums set by > the Fed Reserve. > > > I suspect this action was sufficient for the Fed > Reserve to feel > > > it did not need to intervene further. > > > > > > One thing that was most clear last Tuesday is > that Mr. G > > > recognizes that his role is to manage the > economy, not the stock > > > market. Had he been attempting to control the > stock market, and > > > re-establish the wealth effect, then he would > have insisted on a > > > cut of at least 75 BP, and maybe even a full %. > Of course, had he > > > done a full %, and maybe even 75 BP, the airhead > commentators > > > would have focused on how bad things must be, > and only the Feds > > > realize it. > > > > > > Frankly, I am at a loss to come up with any > suggestions on how to > > > improve the personal spending habits, and > savings habits, of > > > citizens in a free country. Perhaps a public > education program, > > > such as has been done on the issue of smoking or > drug abuse. The > > > citizens of the USA are among the worst for > saving money in the > > > world. Presently the rate is negative. It's one > reason I maintain > > > a long term position in a company selling > software to bankruptcy > > > trustees. Bankruptcy is a solid growth industry, > that only gets > > > better in bad economic times. But it did well > even in the good > > > times. However, this is not the function or > responsibility of > > > FOMC. Had they raised rates to "punish" those > abusing their > > > credit, they would also have punished > corporations and > > > individuals using credit responsibly. And, of > course, they would > > > have stifled economic growth years ago, contrary > to their mandate > > > to manage. > > > > > > The process is usually self correcting, either > thru personal > > > bankruptcy, or thru outrage at the interest > rates being paid on > > > credit cards. We saw both about three years ago, > when rates were > > > around 17 or 18%. People just started cutting up > the cards, and > > > paying off the balances. We still see this today > at financial > > > sites like Motley Fool, where they exhort people > to pay off high > > > interest debt before thinking about investing. > After all, it's a > > > guaranteed return even now of about 12%, and > that's pretty > > > attractive. > > > > > > Mr. G was sharply criticized when he tried to > "jawbone" the > > > bubble out of dot coms and techs stocks with his > famous > > > "euphoria" comment. Kinda funny now that the > commentators > > > criticize him for failing to control the bubble, > when that is not > > > even his responsibility. Where's the media's > responsibility in > > > all this, they were the ones telling new > investors to put money > > > into the market and make a profit, to listen to > some, it was > > > practically assured. Two years ago, at the > height of the dot com > > > bubble, I don't recall any analysts or market > commentators > > > warning that these companies were all start ups, > limited > > > management experience, no earnings and only > minor revenues (look > > > at ETYS for just one monstrous example, went > public with a market > > > cap greater than ToysRUs, and now bankrupt). But > it's easier for > > > the media to blame a govt employee, than to > accept any social > > > responsibility for themselves. > > > > > > The stock market is first and foremost a "free > market". It should > > > not, and cannot, be controlled by an individual > or a govt agency. > > > It must correct itself. Part of that process is > ongoing, but so > > > long as we are wedded to vested interests (media > commentators are > > > there to shock and attract viewers in order to > sell advertising > > > time, wirehouse analysts are there to generate > activity and > > > protect the interests of the wirehouse, > wirehouses downgrading a > > > stock to a "hold" when what they really mean is > "dump that dog as > > > fast as you can enter the sell order"), even > reasonably respected > > > journals such as WSJ or IBD must still sell ad > space to survive. > > > I remember the early days of IBD (then Investors > Daily) when > > > there was virtually no ads, and never an ad from > a company that > > > might be a competitor (e.g. stock screening > services, investment > > > letters, brokerage houses, etc). It's quite > different now that > > > they have built up a subscriber base, and must > generate revenues > > > to cover costs. > > > > > > It's a harsh world in the stock market, but > there === message truncated === __________________________________________________ Do You Yahoo!? Get email at your own domain with Yahoo! Mail. http://personal.mail.yahoo.com/ - - ------------------------------ End of canslim-digest V2 #1224 ****************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.