re: considering:
Yes, debt is very high. But, with unemployment very low, consumers have no problem carrying their debt. And, with profits high, companies don't have a problem carrying their debt either. And low interest rates due to stable low inflation, means that high debt does not mean high costs of servicing the debts. So, high debt levels will not be a problem, unless we see inflation (which would raise interest rates) and/or high unemployment.
Give it a while, before saying the market isn't responding to rate cuts. My view is that the rate cuts (which aren't over yet) will put a floor under the stock market for the next 6 months, and then improving economic conditions in the second half will modestly raise stock valuations.
Actually, their are several energy technologies which are on the verge of going from "blue sky" to "mass market" over the next 5 years. Wind, solar, fuel cells, hybrid cars. And the present high energy costs are causing a huge exploration/development effort for oil and gas in the U.S., such as opening ANWR in Alaska (probably a bigger field than Prudhoe Bay), and building a natural gas pipeline from Alaska to the lower 48. Barring war and another embargo, oil will stay below 40$/B, and have a modest effect on the economy. |
