Zeev's Turnips - No Politics Message Board

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Strategies & Market Trends : Zeev's Turnips - No Politics

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To: Zeev Hed who wrote (8217)	11/27/2001 1:48:30 AM
From: Steve Lee	of 99280

I guess the liquidity from lower interest rates is more significant than any $60BB - $80BB in stimulus. But how does the $5TT+ lost in market cap over the last 18 mths affect liquidity? I guess it is partially mitigated by the fact that a lot of it was late 90s gains anyway. However, it remains that insurance companies, pension funds and private individuals do not have the liquid assets they previously were "banking" on. This must surely have changed the spending/investment plans of many corporations. A lot of capital got misallocated recently but so did labor. Do you think there is a significant number of people who had valuable skills that have taken themselves off the market due to bubble gains or failed enterprises, only to have lost heavily and are now less able to get back into their careers and once again be accretive to GDP? And of course, you have the likes of INTC and CSCO that were booking investment profits that we are supposed to include in backward PE calculations, while forward and current earnings conveniently use the pro forma excuse to exclude investment losses.

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