Mohan, could we be having another episode of "disconnection" between treasuries and the market? Stealth flight to "quality"? The long bond is up a full point but the market is just so-so.
As for the raging argument on MC/GDP, we must be careful not to be side blinded. The percentage of GDP represend in the public market has changed drastically in the last 20 years, and is very different here than in Japan or Europe. In Japan, for instance, a huge chunk of the retailing market is still in private hands, not in public companies, this applies as well to farming, medical services and transportation (which is mostly in Government's hand and not in their MC) we have undergone massive centralization with fewer MOM and POP outfits, . I have no idea by how much this may skew the data, but I am sure that the 129 MC/GDP ratio of Japan at their top would be , I would guess closer to 160 in term of our market. Now, they really did a bubble at their top, and about ten years later, they are still much closer to their bottom (G).
Zeev.
Zeev |
