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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: John Trader who wrote (48094)	6/18/2001 2:37:00 PM
From: Jacob Snyder	Read Replies (1) \| Respond to of 70976

OT re consumer spending and Efficient Markets: Another reason consumer spending is holding up, is that the threat (or reality) of unemployment, and housing prices, have a lot more influence on most consumers, than changes in their stock portfolio. Unemployment is up, but just slightly up, off a generation low point. Housing prices are up. A record % of Americans own stock, but most of those new stockholders own very little stock, and their home equity is still their biggest investment by far. If home prices start to decline sharply, I will be a lot more pessimistic about the macro picture. The Efficient Market Theory rests on these assumptions: 1. All players have access to all important information, and get that access at the same time. 2. The market in stocks is truly a fair and free market, not subject to manipulation or structural rigidities/friction. 3. Investors are rational; they are not manic-depressive herd animals. IMO, there is overwhelming evidence against those assumptions.