Mike:
I agree it does appear that credit is not expanding fast enough for both, but What action (other than interest rate increase) is going to cause the average investor to lose faith in the stable 20% returns he has had for the last several years.
If we look at history, we can effectively discount earnings and earnings growth as they basically stink (in relation to prices) Its not fundamentals, as worldwide overcapacity is a known, price to book, price to sales, price to dividends, etc, you choose the one you like most, they are all at record levels. Its not consumer confidence as we spend at record rates. Its not lack of savings as the rest of the world saves in our dollar and our lack of savings has just been made up for with the credit expansion. Its not foreign affairs, "Kosovo crisis", domestic affairs <g> president Clinton etc.
So whats left . . . In my opinion, whats left is interest rate increase(s) whether ordained by AG or not. At any rate, thats my bet until the market shakes everyones confidence - and then... I reverse my position. |
