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To: GST who wrote (128546)7/18/2001 6:28:03 PM
From: schrodingers_cat  Read Replies (2) | Respond to of 164684
 
>Cat: It is that very important risk that is NOT priced into the market.

That's true, a recession is not fully priced in. I guess its a question of how likely you consider a recession to be, given the size of the Fed stimulus.

One possibility that few are considering is that the Fed may over do things, giving us another brief economic boom followed by inflation and recession. I think something like this happened after '87. The implication for stocks would be a strong recovery until inflation started to take-off.

Edit:My economic history is probably fuzzy, but weren't the seventies like this too?