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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Paul Shread who wrote (4263)	3/27/2001 12:42:09 PM
From: dawgfan2000	Respond to of 52237

Another update from Uncle Warren. dailynews.yahoo.com

To: Paul Shread who wrote (4263)	3/27/2001 12:55:25 PM
From: James C. Mc Gowan	Respond to of 52237

RE: Consumer Confidence #'s; I recall that Greenspan took pains recently, when the confidence numbers were down, to say that consumers often say one thing, then do another. Today's spike in confidence numbers may be, from a contrarian point of view, just false bravado on the part of those polled. Let's face it, $4 trillion in "wealth effect" cannot be translated into pushing the credit/spending envelop any further, IMHO. I attended a professional conference in San Diego, for a national organization, this past weekend.An informal poll I took reflects that most folks are still LTB@H oriented, even though they note a dramatic falloff in portfolio values. The most common comment was that their stocks "would come back",especially big cap techs. I think this weeks' rally is smoke and mirrors, come next week, the warnings turn to actual earnings reports and the spin doctors will be hard pressed, BWTHDIK. James

To: Paul Shread who wrote (4263)	3/27/2001 2:05:48 PM
From: JRI	Read Replies (3) \| Respond to of 52237

Paul...thanks for the article...good to know I'm not the only one thinking like this.... The last couple paragraphs really struck me hard....Allan Sinai is representing the kind of ridiculous logic that I railed against....read this again carefully... ______________________________________________________ Allen Sinai, president of Decision Economics Inc., also rejects the "take your castor oil" view of recessions. "There is no question there are serious imbalances that have to be dealt with, but I don't think it requires a recession," Sinai said. "That's a defeatist attitude." Sinai's prescription: an immediate tax cut of $75 billion to $100 billion to offset the expected increase in household savings and keep Americans living beyond their means, if only for a little while longer. _____________________________________________________ Now, clearly, the last paragraph is the author's words (not Sinai's)...but can anyone argue with the author's words? Isn't this scary logic (by Sinai). Give us more money so we can buy more stuff we don't really need (maintain capacity-investment capital- in/for things we won't be able to buy much longer)...to keep us from addressing the real issue (the need for net savings again)...Does Sinai's solution really seem healthy to you (in the long-run?)..Isn't this guy a supposed famous economist? Also, given the 4 trillion loss in market wealth...(the figure is likely higher now with the dip in the Dow)......Last year, I read several times, that for every dollar gained in stock market wealth, consumers increased their spending 4 cents...if the inverse is true, we are looking at a (at least) $160 billion decrease in consumer spending.....so even with a $75-100 billion dollar tax cut (if, somehow, we could get it immediately).....we will still be short (and there will be a slowdown in consumer spending)....by an estimated $ 60-85 Billion.... These numbers don't take in account the following: (1) Further decreases in Dow or Naz that could lead to a further spending drag (2) "Shock" effect....the market losses occurred faster than the market gains...could this impact the velocity of the slowdown in consumer spending (or the % size of such)...(3) Tax cuts will drain money from Federal government, possibly endanger budget surplus, which jeopardizes current lower interest rates...