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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Skeet Shipman who wrote (54139)	8/13/2001 9:31:16 PM
From: Skeet Shipman	Respond to of 94695

What are the economists thinking? It may be longer than a couple of weeks of this! From The Looming Fiscal Threat From Falling Stock Prices dismal.com With stock prices and trading volumes going nowhere quickly, taxable realized capital gains are expected to plunge in 2001 by nearly one-third, to only $375 billion. They are expected to fall again in 2002 to $320 billion, the lowest realizations since 1996. This is a startlingly large expected decline in realizations and is disproportionately large compared to the expected changes in stock prices. Capital gains realizations clearly fall even further if the stock market performs less well than is anticipated in the baseline outlook. Suppose, for example, that the S&P 500 index continues to trade near its current 1300 level during the next two years. Under this scenario, expected realizations plunge to an estimated $315 billion in 2001 and $260 billion in 2002. If stock prices were to decline another 25%, with the S&P 500 index falling to 1000, then realizations would crater to $210 billion in 2001 and $170 billion in 2002, completely unwinding the windfall to federal government coffers from the surge in stock prices since the mid-1990s.