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Pastimes : Ask Mohan about the Market

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To: jeff wheatley who wrote (11217)12/12/1997 12:31:00 PM
From: Tommaso  Read Replies (1) of 18056
 
See link (provided by John Hunt):

biz.yahoo.com

I am surprised that any threads dealing with interest rates as such, on SI, seem unused. Anyone who hasn't yet done so might take note that the 30-year treasury is now solidly under 6%.

With the negative producer price index for the year and the reports on inventories, it sure looks like the start of deflation. Which could include a business slow-down. Which could cut earning--maybe even cause some losses. Which could raise the current P/Es on U.S. Stocks from 20+ to as high as 40+. Which would mean that if stocks readjusted in price to the 20+ level, they would have to drop 50%. And tra-la-la.
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