From Hi Techs Post
The key is to figure out what that norm will be. This is the issue that I now
believe will become central to the debate in financial markets, Washington, business
circles, and Main Street. As I see it, most are still clinging to the notion that The Shock is
a cyclical event that will be quickly be followed by a reversion back to the growth norms
we had all gotten accustomed to in the latter half of the 1990s.
Morgan Stanley; are they not running the largest Short Position in their hedge operations, to the extent that they represent risking their operations if the scenario goes against them?
Like the NASDAQ bubble, I suspect that history will judge the performance of
the US economy in the latter half of the 1990s to have been an aberration, not the dawn
of a New Era. The Shock is a wake-up call for those still clinging to now-antiquated
perceptions of America’s growth dynamic. Call it the end of the New Economy. That
suggests a significant re-rating of asset prices still lies ahead.
The Nasdaq Bubble as so many are fond of talking about it, lasted for a whole 8 months from bottom to climax. For many small and mid cap companies, leading into the fall of 1999, most were starved of all liquidity.
For a huge number of stocks the Bubble went from Mid Nov to Apri 2000 when the inside trade went short. Buy and Hold investors never sold, the whole game was played out by the insiders with support from a complicit media.
We are talking about many great growth stocks, being tarred as excess along with the VC backed mill of IPO's that were the actual culprits. VC excesses are in fact what should be on trial, not the universe of mid and small cap companies with steady growth outlooks. Naturally the VC's and the market in general, placed valuations on many companies bringin them out with very low floats, and after lockups selling to the public at huge profits. This is the real story behind the bubble. A story that Morgan played a key role in.
These braod generalizations are but sophisticated rationalizations from an agency with a financial interest in a given outcome.
Every point in this guys presentation can and should be challenged.
As an Economist this guy talks about the economy, and not stocks specificly. Everything said, is part of a backdrop being framed by Morgan to suit Morgan outcomes. These points will be referred to by those on the other side of Morgans Chinese wall, as the evidence for whatever action is being advised by the other parts of Morgans Network..
Credible? Maybe or maybe not! |
