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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Earlie who wrote (25120)10/5/2000 11:22:28 PM
From: LLCF  Read Replies (1) of 436258
 
I liked that article 'The Perfect Storm'... there are more things than one can count 'converging' to create possible nasty scenarios... my favorites are:

Inevitable recession [as he pointed out, an inordinate proportion of GDP coming from the consumer] just at the time when:
1.) The consumer has taken on historically very high debt.
2.) Corporate America has leveraged their balance sheets up for the never ending boom as well.
3.) The average American has more at stake in the stock market than every before, by a mile.
4.) The stock market is at historic high valuations especially given the boom [normally ratio's are high at the bottom!]
5.) Foreign investment in U.S. stocks is at all time highs and has spiked incredibly.
6.) U.S. dollar is at historic highs keeping inflation tame 'looking' while making U.S. equities even HIGHER in world terms.
7.) Huge current account deficits run by the US accelerating wildly & continue creating more dollars sloshing around the globe... yet another liability of the U.S. economy.
8.) Number 7 has been going on for decades making the dollar the worlds 'reserve currency' magnifying any problems in the U.S. economy and likely to set off massive dislocations as other countries scramble to 'cut the rope' connecting them to the lead climber in the event of a severe U.S. recession, depression, or even the appearance of the posiblility.

DAK
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