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

To: Oblomov who wrote (13259)	3/1/2000 6:46:00 PM
From: BGR	Respond to of 42523

Andrew, 1. Indexing is merely a mirror for the broader market by definition. So, I agree with your observation. But, as you yourself say, it is not a negative. 2. Given that most old-economy companies depend on floating debt for raising capital, whereas most new-economy companies depend on the equities market, I do not understand your concern. Sara Lee's debt doesn't become more expensive if its equity price drops because of a narrow market. OTOH, if its equity price drops because of a fundamental weakness which the equities market has perceived, that is a different issue. Also, I find the job and consumer demand loss argument somewhat Luddite (no offence, please). USA went from 80% argicultural employment in the 1800's to 2% in the 2000's with hardly a scratch in its economic health. 3. As for the public debt, nothing is certain, but people deal with expectations. It seems that the public-at-large is indeed thinking like the economists, however, when it comes to choosing between borrowing and spending in the face of projected budget surpluses. So, I think that your contention that the public does not think like economists is not valid, at least in this scenerio. -BGR.