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Strategies & Market Trends : MDA - Market Direction Analysis

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To: Haim R. Branisteanu who wrote (49486)	5/5/2000 9:00:00 PM
From: Zeev Hed	Read Replies (2) of 99985

Haim, I saw you use before the valuation of $17 Trillions for the US market, I was under the (probably wrong) impression that a good measure of total valuation is given by the Willshire 5000, or a current valuation of $13.4 Trillions. As for increases in loans, I get for the last 6 months an increase of $50 Billions in commercial paper, but only $20 Billions in total bank lending, or a total of only $35 Billions per quarter, since you must include in this the April date in which a lot of income taxes are paid (more than normal quarterly, but I do not know how much), I think that with a growth of end goods at $100 Billions per quarter, an increase in debt of $35 Billions (and could it be just $25 B because of taxes?) is not really that bad. What surprised me more is that the increase in working capital comes almost exclusively from debt and not from corporate cash flow (which I think excluding the I-net and biotech money losing operations) is better than 3%. After all, all this technology that is manufactured by the "new economy" is someone's depreciable asset. I would guess that (without going into their balance sheet right now) that a company like INTC has a good $.5 billion quarterly in cash flow from depreciation. That is why I do not understand that bulge in corporate debt. And I believe your numbers do not even account for some gargantuan debt offerings in the last six months (was it a Billion or so just for AMZN?). Could it be that somehow, a lot of the money that is going into IPO actually found its way there from bank lending and corporate commercial paper? Zeev

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