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Technology Stocks : WDC/Sandisk Corporation -- Ignore unavailable to you. Want to Upgrade?

To: puborectalis who wrote (19739)	3/20/2001 10:34:20 AM
From: Art Bechhoefer	Read Replies (1) \| Respond to of 60323

Kudlow's belief that "The Fed must act aggressively merely to get us back to stable money. Then the economy and the stock market will recover" is simplistic. Even though the economic slump is not at the level of a recession, it is far more serious in some ways. A recent report notes that some 60 percent of the population owns stock (excluding that in 401K and other retirement accounts). In 1987, prior to the crash, less than half that number owned stocks either directly or in the form of mutual funds. Thus, when stocks go down now, they have a much greater impact on consumer spending and overall sentiment than they did in 1987. The Federal Reserve apparently does not recognize this, otherwise they would be eager to drop interest rates more quickly, and by a larger amount than they have done so far. Nor does Kudlow fully realize the impact of stocks on the general public, or if he does, he fails to mention it. Whereas families typically held most of their assets in real estate back in the 1950's and 1960's, now the opposite is true. Most assets are in the form of stocks. That change just has to have a greater impact on consumer spending now than before. When the head of the Fed says consumers should not be so pessimistic, you can tell he hasn't a clue. Art