Long Boom

[DANIEL.DAVIES at flemings.com]

Lot of sense here, but I draw a different conclusion.  To me it looks like
the Fed is worrying about domestic conditions and is gearing up to make the
rest of the world pick up the ball as importer of last resort from Asia.
Lots of whispers in our industry that Brazil is about to float a big
(>$2bn) bond issue.  If Brazil has taken care of its funding requirement
for the year, it removes the last really Bad Thing that could happen to the
banking system if the Fed raised rates.  Cheap money in Europe and UK might
cushion the fall, but since the move would signify a change of direction,
I'd be looking to early 1994 as the precedent, if not worse.  Another
Volcker shock, anyone?

dd

PS Not that I agree with this EU-hegemony thing, but I was in France a
couple of weeks ago, and I'd say that they're now reaching the point where
Internet has taken over and the old Minitel architecture has been scrapped.

Date: Fri, 09 Apr 1999 03:52:21 -0700 (PDT)
From: Dennis R Redmond <dredmond at OREGON.UOREGON.EDU>
Subject: Long Boom

Of course, the US stock market is insane. But consider this:

1. Renault is merging with Nissan, while the EU banks refinance SE Asia.
The Euromultis and the Asiamultis are pulling together as a team at
last.
2.  Fiscal policy is turning humongously stimulative, all over the world,
thanks to Japan's subzero interest rates and the ECB's 0.5 percent rate
cut.
3. Halflife's Linux server is in the last stages of beta testing (very
important, because the game market leads the consumer market).

Maybe it won't be enough to avert a meltdown when the Bubble bursts.  But
the above suggests that the new hegemons are at last instituting newly
expansive economic policies, and will do very well indeed in the
info/tech markets exemplified by the freeware movement. My
(euro-denominated) bets are on a long boom in 2000-2025.

- -- Dennis

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