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: Perspective who wrote (2215)	6/9/2003 1:48:46 PM
From: Wyätt Gwyön	Read Replies (1) of 4907

AG can continue to pin the yield curve where it presently is ad infinitum there is a Heisenberg principle in finance--Greenspan can pin the rates, or he can pin the money supply, but he can't do both. Earnings track the inflation, and equities track the earnings this bear market rally shows equities track anything but earnings in the short run. if you mean they track earnings in the long run, you must also know that equities track a premium to risk-free return in the long run. right now equities are well below this equity risk premium, so they must correct downward in the long run. as for earnings tracking inflation, again, where is the inflation in earnings? all of the earnings growth in the SPX over the last year is due to energy companies. only question is whether or not the rest of the world joins in the bonfire of the currencies, and their likelihood to do so prevents me from seeking refuge in international financial assets. it seems pretty apparent that all countries will do this. the Euros to stay competitive with the US, and Asia so that we can continue to buy their goods. however, just because all currencies will try to devalue doesn't mean they will all be equally successful. the US, due to its unprecedented twin deficits and the resoluteness of the Fed to debauch the currency, should consider to be the most successful at devaluing. it seems Greenspan's main evil aim is to steal value from creditors and reduce the real value of debts so that consumers can continue to borrow.

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