VOLTAIRE'S PORCH-MODERATED Message Board

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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: RR who wrote (57694)	4/3/2003 1:35:15 AM
From: Sully-	Read Replies (1) of 65232

SARS has made it's way here & Canada. Whether it is a serious problem remains to be seen. However, it already is having global economic effects that could get worse if SARS isn't contained or cured. This is another wild card to add to the current uncertainty about economic growth. I am having a hard time finding a bull case in the current enviroment RR. It's not that I don't want a return of the bull or anything. It's just that there are so many things that are keeping the global economy on the edge of recession. Corporate spending has been on hold with war/terrorism jitters. N Korea has been sabre rattling again. Syria isn't helping matters. Neither are the Russians or the French. Consumer spending has weakened in this environment too. There is still too much over-capacity that needs to be absorbed. Oil has been a harsh tax on consumers & corporate profits for many months. Even with the recent fall to $30+/- per barrel, it still is inflationary & a burden on consumers spending & corp profits until it goes below $25 per barrel. Earnings look to come in at or below consensus with guarded or lack of forward visibility. And current equitiy valuations are still in nose bleed territory. While I believe this war will end soon enough to be considered a quick victory, there will be continued shooting & terrorist attacks for some time to come after the Butcher of Baghdad's regime falls. This regime is chock full of folks who have so much blood on their hands that many of them may decide to fight to the death because they know their fate if they surrender or are caught. Again, I don't want to rain on anyone's parade, but I just don't see blue skies ahead for the economy right now. Perhaps you can help shine a little light on the bull case? Hope all is well RR.

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