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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: AC Flyer who wrote (17033)3/19/2002 10:23:48 PM
From: orkrious  Read Replies (3) of 74559
 
the US has lower debt as a percentage of GDP than at many times in the country's history and just about the lowest debt per capita in the developed world.


Not sure about that, but how about this:

Ned Davis Research recently provided some data that suggests just how high is too high.On January 31, 2002, the value of the Wilshire 5000 (which contains 6500 stocks) was $12.7 trillion, equivalent to 129% of GDP (GDP being $9.9 billion). While this is down from a peak 170.8% of GDP at the stock market's March 2000 bubble-high, it is far above the average ratio since 1925 of 54.5%.Ned Davis maintains that anything above 71.8% is "very overvalued." By way of historical comparison (a quaint notion in this day and age), this ratio was 86.5% before the 1929 crash and 79.2% before the 1973-74 collapse. At the beginning of the bull market that began in 1982, this ratio was down to 36%.-
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