top-of-cycle stuff

Tom Lehman uswa12 at lorainccc.edu
Thu May 27 07:40:43 PDT 1999


When was the last time the Federal Reserve raised reserve requirements? That would be a unique way to tighten---is it in Big Al's bag of tricks?

Your email pal,

Tom L.

DANIEL.DAVIES at flemings.com wrote:


> Reading the runes, I'd now like to sign up for membership of the bear club
> wrt world interest rates and equity markets.
>
> I've always thought (and told clients) that we should only say that the
> current situation is a bubble when we see sizeable commercial property
> development activity. Commercial property is the canonical
> crazy-easy-money investment, because it can only be got off the ground with
> vast amounts of cheap bank credit. Viz: Canary Wharf, the Scandinavian
> banking crisis, Tokyo, Citibank's second period of economic insolvency
> during the 80s, Malaysia etc. It's what people get into when bond and
> equity yields are so depressed that literally nothing else will provide and
> acceptable income.
>
> Now, all on one day I've been informed of:
>
> An Italian bank spinning off its real estate interests into a quoted
> subsidiary
>
> Credit Suisse Asset Management starting a real estate investment company
>
> And a guy in Sao Paolo announcing that Brazil is going to have the tallest
> skyscraper in the world.
>
> Bubble, bubble, who's in trouble. If foundations ever get dug for that
> tower, in particular, I'll be selling all of my equities, of which I have
> none.
>
> regards
>
> dd
>
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