me--
>>Since Asia represents only 7% of world GDP, it is really meaningless who they are
interconnected with. A 25% drop in their payments is only a 2% drop worldwide,
and that is spread out over myriad sources, therefore deflected....<<
here is my point...that 2% causes someone else to drop off, maybe a little more. that gets the snowball rolling. and, this figure is wrong for asia overall...japan alone probably represents 7% of global GDP. look at what little problems in such a small part of the world economy are doing to japan. look at what that will do to us in turn.
>>Rates need to drop since Greenspan himself has stated that LOW levels of inflation
are preferential to NO inflation or DEflation. Since we are stagnant in that regard, it
is likely that he will lower rates.<<
and he is right. the question is whether it will be enough. at any rate, i think he is preparing us for the bad news. look, all the liquidity that is being added is going into the EQUITY markets...its not being employed to increase production, etc. what does this tell you?
if we drop rates too much, we could also see capital flight out of the dollar. market rates would have to go up.
>>Negative surprises are increasing SLIGHTLY, but the rate of positive surprises is
flat. The problem is more that companies that were EXPECTED to have positive
surprises have come up short....<<
keep in mind that the companies that were supposed to have positive suprises, had already had estimates reduced dramatically. earnings revisions are becoming the favorite pass times of analysts.
good luck to all,
trey |
