Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Pancho Villa who wrote (5661)	3/28/1998 11:13:00 PM
From: Tom Hua	Read Replies (1) of 18691

Actually, you cannot do the math this way. Your calculation assumes that the previous month's consumer spending and personal income are fairly close They are indeed. See the following for more info. The Commerce Department said Americans' personal income increased a strong 0.6% in February for the second consecutive month. The gain, to a seasonally adjusted annual rate of $7.14 trillion, outpaced the healthy 0.4% advance in consumer spending to $5.66 trillion. If I remember correctly, about 40% of the nation tax receipts derive from personal income tax, or about $600 B. (Pancho, you're the expert here, please correct me if I'm way off base). This puts the savings rate at $880 B/year. Assume people put half of their savings in the market, that's a whopping $36 B/month. Add another $5 B/month from 401 k, you're looking at a net inflow of $2 B/day!!. Regards, Tom

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