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Strategies & Market Trends : ahhaha's ahs

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To: sea_biscuit who wrote (897)	1/29/2001 3:28:32 PM
From: ahhaha	Read Replies (1) of 24758

Apparently so. When JCP peaked in early '98 the wealth effect was in full gear and continued for at least two more years. Now that the wealth effect is over JCP is starting to rally. But I wouldn't hang too much on what an individual company has done. The wealth effect has nothing to do with corporate profits. They are merely coincidental. Indeed, the wealth effect lags expectations for changes in corporate profits which stock prices reflect. This is definitely what is happening in JCP and many others. What you have in mind which is the core problem is that monetary authority should respond to what has happened in the past. This is what they do too often and it's disastrous. People only want them to pump in the dough to bail them out from the failure of their past greed. The FED can't do that because the result of the bailing, wouldn't do that, but it would create a far worse situation. You aren't old enough to understand that. You'd just get more greedy, as would everyone else, and then circumstances would arise that would send you into the Stone Age. And everyone else.

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