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Politics : Stockman Scott's Political Debate Porch

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To: sylvester80 who wrote (1237)	7/2/2002 10:35:04 PM
From: t2	Read Replies (3) of 89467

"It looks like the individual investor is going to stay on the sidelines here," says Yardeni. "Same for institutional investors. And foreign investors are just dumping stocks. When you try to figure who is going to buy here, it's hard." Syl, This time it is different. There is no support underneath market. To me it is partly American policy that can considered a reason for foreign dumping of stocks. Apart from the usual Naz/dollar bubble/deficits/trade imbalances/crisis in confidence etc.., here is a few others that are are critical for the longer term: -Trade barriers being put up is the first example. Created a big stir worldwide. -Security is the big concern. Getting the best people from around the world as immigrants is not possible anymore. There are too many restrictions that are easy to understand but will hurt the economy over the longer term. -The businessmen from the around the world will no longer see America as the land of opportunity. People of color (other than black or white) will see dangers of a backlash against if there is some other terrorist attack. -on the other hand, there a few countries that are now opening up..germany for example is trying get high tech workers from around the globe. So now there is more competition for the smartest people on the globe and given the current US climate, they may opt for European countries. -middle eastern people that held most of their wealth in the US will want to bail out as quick as possible. Even if the US market is undervalued, the risk of having their assets frozen will scare them away; it is better to lose 20% in another stock market than risking losing everything. Of course, people from this region will develop all kinds of conspiracy theories about the US trying to seize Arab wealth. There are just too many headlines about frozen assets that if the government makes the smallest connection, say good bye to your wealth. -next the Europeans. They seem to view the US in a different light now. Policies of holding people prisoners without a fair trial is not acceptable to the European socialist world. To not call the detainees as prisoners of war is also a problem. So now they no longer see the Americans as the people of high moral standards in comparison to themselves.<g> The issues of capital punishment also sets the cultures apart. Executions are much more common in third world countries. I don't believe any developed European country allows it. -there seems to be differences in Israel/Palestinian issues. I am not saying that many of the Euro issues are new; just that there may be even more resentment of Americans. They will thinking how a country with such lower moral standards be the superpower of the world. They are going to after the strongest American company, Microsoft...until they are weakened so much that a European alternative finally emerges. (well we have the DOJ/States to thank for that). The real EU actions against Microsoft are sometime in the future. OK..I won't start on the Chinese. <g> ----------------------------------------- All this and also the more obvious reasons will hurt the US economy in the longer term. I think the global investors see it as well. That is why the market can be in much more trouble than most believe. 12% foreign ownership of US stocks is a lot. (sorry about the disorganized post--I am sure I missed a bunch of obvious points too) btw--Also this is just my observation and also my gut feeling on what is happening out there. I am NOT saying that US policy is unnecessary..just that there are longer term consequences for the markets/economy.

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