Bob Brinker: Market Savant & Radio Host Message Board

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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: Skeeter Bug who wrote (42783)	4/13/2009 11:36:24 AM
From: Boca_PETE	of 42834

The thinking in this linked article exactly parallels the viewpoint I've held for the past several months. finance.yahoo.com "... conviction that earnings won't just snap back to pre-crash highs the way they have in recent recessions. Why not? In short, because the peak earnings of 2007 were inflated by leverage (debt), and that leverage is now been stripped from the system. Last time we went through an extended period of deleveraging, after the 1920s, it took 18 years for earnings to regain their old highs. If this recovery mirrors the 1930s recovery, S&P 500 earnings won't regain their highs until 2025 or so." Of course the above assumes the success of FED & Treasury efforts to return the U.S. economy to a path of growth. I they fail or overshoot and we get hyperinflation, heaven knows what we will be in for. In the words of Lord Admiral Nelson before going into battle, "May we be grateful for that which we are about to receive". P

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