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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: Lucretius who wrote (7967)	2/9/2000 12:14:00 AM
From: pater tenebrarum	Read Replies (3) \| Respond to of 42523

the TRAN looks quite collapsed to me already...<g> let's not get carried away with the inflationary meltdown just yet...note that apparently pricing power is still an issue for most firms. however, the basic preconditions for an outbreak of inflation are all present...maybe it's like a coiled spring right now, waiting to bust forth. in any case, it's either inflation, or shrinking margins for many cos. to the bulls: stocks are (in the main) claims on future EARNINGS streams...(yes, EARNINGS)...the future EARNINGS streams are discounted using current INTEREST RATES. the model most widely used to do so is that of the Fed, based on the yield on the 10-year note and I/B/E/S forward earnings estimates. according to this model, stocks are now 70% overvalued, the biggest gap between the S&P's actual level and it's fair value EVER. think somebody will read this and decide to sell? <g>