Due to foreign moola leaving US equities...

Interesting post from Usagold...

Goldsun (01/01/00; 22:38:09MDT - Msg ID:22019)

Y2K Relief Selloff

Canamami

I agree with your suggested withdrawal of foreign money from US equities due to perception of Y2K as a nonevent. Which could have the benefit of producing a market crash before the effects of Y2K are felt.

Interesting to see if fed starts sponging up its Y2K liquidity spill. Delay might indicate they don't believe it's over either.

-- Andy (2000EOD@prodigy.net), January 02, 2000

Answers

I agree with this scenario. The US equity market is overvalued by any method of evaluation, but is however perceived as a relatively stable environment in times of world crisis such as Y2K. The upside available in re-emerging markets that are recovering from the Asian contagion is obviously much greater than the US market.

-- fubar (foo@bar.com), January 02, 2000.

Well, I thought spx and oex put leaps were on sale late last week, so I bought a bunch. Hope we're right.

dave

-- dave (wootendave@hotmail.com), January 02, 2000.

An old trading maxim:

Buy the rumor, sell the fact.

The markets have acted as if Y2K was going to be nothing (bought the rumor). Now that the rollover has occurred peacefully, is it time to sell the fact?

Also consider that many may have waited for the new year to take their profits from the big run-up in order to avoid tax consequences for 1999.

-- Bruce (just@thought.or two), January 02, 2000.

It will be interesting to see the effect on the economy and markets now that the artificially stimulative personal, governmental, and corporate spending on this "hoax" draw to a close.

I wonder how the Fed will continue to justify the current rate of debt expansion with no "hoax" to support their reckless policies the past few years.

I wonder how many realize that the current expansion in equity valuations is merely a side effect of these multiplicative levels of debt expansion beyond the economy's actual need for capital.

I wonder if the tech sectors "earnings" projections will be revised downward, now that it's obvious no further tech replacement spending need be applied to this particular "hoax" has fizzled.

A cartoon from a while back distilled all of Y2k as "almost as good as a war" in its artificially stimulative effects. Seeing as how a lot of money was borrowed and spent to combat this "enemy", he may have been right on target in a quite laconic sort of way.

The show just keeps getting more engaging all the time.

-- Nathan (nospam@all.com), January 02, 2000.