Heinz Blasnik- Views You Can Use Message Board

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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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To: Jim Willie CB who wrote (210)	4/18/2003 11:22:34 AM
From: GraceZ	Read Replies (4) of 4907

the first depression is with corporate earnings Corporate earnings are under tremendous pressure, some old line companies will not survive. You look at the dinosaurs on the NYSE with their loads of debt, declining margins and in a low growth environment it's just a matter of time before they disappear. Until we see some real changes in corporate taxes you can expect corporations to continue to fail on a regular basis. bear in mind that Naz100 has no PE, since it has no earnings 20% of the Naz 100 is INTC and MSFT. MSFT throws off a billion a month in free cashflow. Don't cry for the Naz, some of what will be the most profitable companies in the future are well hidden out in the open on the Nasdaq. I know of several young middle class couples in lesser homes they are struggling, with some minor equity in their homes the ones with children are especially strapped they live paycheck to paycheck, in fear they are very close to bankrupt their expenses are rising every year you seem to want to sugarcoat the financial straits for Americans I'm not sugar coating it, I'm just pointing out that if 50% of the people are technically bankrupt that it's not a new situation. As long as I've been helping people with their personal finances I've been dealing with people who are technically bankrupt, for most who are young with good skills it's not a major problem because they earn their way out of it. In every single income group you find people who habitually live beyond their means, in a time where their incomes are stagnant or shrinking they get exposed but they are always there. I would say it's almost the rule rather then the exception in America to live just slightly beyond your means. This isn't new and it isn't caused by the current economic slowdown. It comes from people habitually trying to fill up their empty lives with stuff. What I see a lot of now are middle class people who thought they had a lot more money (unrealized paper profits) a few years ago and the loss of that money makes them think that the world is in pretty bad shape. They are hurting but it's mostly from the loss of their riches, not because they are poor or on the brink of bankruptcy. If I do a back of the envelope net worth statement I find that they aren't anywhere close to being bankrupt and in comparison to when they were in their 20s they've made tremendous progress financially but it doesn't feel that way to them because they had so much just a short time ago. It's a well known fact that losses make people feel worse proportionally then gains make them feel good.

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