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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Giordano Bruno who wrote (110952)	7/1/2001 7:35:59 PM
From: patron_anejo_por_favor	Read Replies (1) of 436258

Outstanding piece, JJ. Those guys (ContraryInvestor) do the best "you are here" roadmaps of the market out there. This paragraph sums it up nicely: We're not trying to suggest that the current leverage seen in the macro balance sheet of the US financial system is about to plunge our society into the black abyss of economic "no return". Rather that this generic balance sheet mix will act as a constraint on our ability to reinvigorate economic growth ahead. The financial markets may be looking for economic stabilization in the current period, but possibly the more important question to be addressed is the potential trajectory of real growth that can reasonably be expected to occur once this significant period of adjustment winds down. And, of course, what market participants should currently "pay" for this expected rate of growth. In short, debt service requirements are constant, and asset valuations are transient. Not a great time to be a huge net borrower (ie, J4P) when the former is at record highs (relative to GDP) and the latter is at record lows (relative to GDP). Got T-Bills?

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