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Strategies & Market Trends : MARKET INDEX TECHNICAL ANALYSIS - MITA -- Ignore unavailable to you. Want to Upgrade?

To: fut_trade who wrote (1532)	11/26/1999 9:05:00 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 19219

Peter, the point being made with regards to trading volume vs. GDP is the extent to which the stock market has become central to the culture and economy of the U.S. once again, the implication being that once the stock market's importance goes past a certain level, this is indicative of an investment mania. as to the forward valuations of the '20's, these look only excessive in HINDSIGHT, as '29 was followed by the great depression and a collapse in corporate earnings. in the year '29 itself, corporate profits were at a then record high, and the forward looking estimates at the time looked as sanguine as today's. we can therefore make no conclusions whatsoever with regards to today's forward valuations, as they depend on the forecasts being correct. my own view is that we will once again get NO advance warning from analysts or rating agencies when the sh*t is about to hit the fan. since every dollar of GDP requires 5 dollars in new credit creation these days (vs. 2 dollars at the previous peak of note, reached in 1929) and both consumers and corporations have already increased their debt loads to post depression record highs, i suppose that a natural limit to new credit creation will be reached at some point. when that happens, the market as well as the economy will be in for the hardest landing in generations imo. regards, hb