To: Stoctrash who wrote (3110 ) 1/8/2001 12:06:51 PM From: John Pitera Respond to Now you're talking Fred -g-But overcapacity and weak pricing suggest corporate profits are more vulnerable to a slowdown than gross domestic product. Indeed, over the past two months, the consensus 2001 profit- growth estimate for the S&P 500 Index has dropped to 8.4% from 15.6%. consensus estimates remain unrealistically high for many companies and probably will fall further over the next few months . That many stocks continue to plummet on earnings warnings is a sign that profit shortfalls remain one of the biggest risks to investors.The Greenspan Gangsters have so far created the greatest slide in U.S. stocks [in decades]. Their great advice to Japan has really helped. The Japanese stock market is still down about 65%-plus from its high. And the U.S. is about to fall into the Great Recession of 2001. Sorry if we lack faith in the Greenspan Gangsters' ability to save Wall Street. Fortunately, many were not lulled into the Greenspan Financial Mania and are now enjoying the return of value investing. Crises are great news for the stock market. The Asian financial crisis of 1997 was a favorable development for the U.S. economy and for the stock market, contrary to what was then Wall Street consensus. The Latin American and Russian crises of 1998 were followed by continued strength and rising stock prices. Last, but not least, Y2K fears were accompanied by strong stock prices and a strong economy.The only way to protect the system from the impact of a crisis is to print money. That is what the Fed has done in the past and is the most likely course of action in the coming months. The Fed has always followed the message of the markets, and it has always implemented monetary policy to protect the banking system. This time is not going to be an exception. Some of this liquidity will go into the stock market and will be very bullish for stocks
