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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Srexley who wrote (96900)	12/1/2000 11:36:04 AM
From: WTSherman	Read Replies (1) \| Respond to of 769670

<Clarity and peace. Then people won't be such panic cases and our economy will get back on track relatively quickly. It aint as bad as it looks out there (imo)< I think it depends upon your time frame. If the election mess is resolved(either way) it will certainly provide some short term ooomph to the market. I don't think Mid East peace negotiations will have much impact unless a major war breaks out(then a negative impact). So, if you're thinking of possibilities for a short term hit(your LEAP strategy sounds like it). You're probably right. However, if you're talking about longer term prospects, I'm not so confident. In terms of the economy you've got several problems. First and foremost, overall demand is pretty much satiated. Booms tend to be driven by pent up demand, very little of that around(IMO). Then there is the impact of NAZ declines on spending patterns by consumers. The highest spending group of consumers right now are the 30-45 age group. These are also the people most likely to be heavily invested in tech stocks and/or other relatively highly speculative investments. These folks are feeling a lot less "wealthy" than they were a few months ago and much less wealthy than they felt last March. Add to this the continuing impact of oil prices and its cumulative effect on family finances and you have an almost perfect prescription for a major pull back in discretionary spending. On the monetary front you have the Fed and Uncle Allan G. The Fed has historically been much, MUCH more aggressive about increasing rates in the face of inflationary pressures than they have been to lower rates in the face of recessionary pressures. At best AG moves to a neutral stance on 12/17 and no rate changes are made until its too late. Finally, there is the risk that "dubya" will try to push through an across the board tax decrease. This will make the situation worse as it will work at cross purposes with Fed monetary strategy and probably keep interest rates higher for longer. All in all, my best guess is that the economy really slumps over the next few months and takes the rest of '01 to turn it around. 60/40 chance of this happening...