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

To: bruceleroy1_- who wrote (16497)	8/23/2001 12:28:24 PM
From: eddieww	Read Replies (1) \| Respond to of 52237

If we simply went through a short period where corporations built more goods than there was immediate demand for then we are in for a garden-variety inventory correction. Once inventories are back in balance with demand, a new virtuous circle of higher demand - higher production may resume to a greater or lesser extent. If corporations took on a great deal of debt to build the capacity to build much more goods than there will be demand for, then we are in a malinvestment cycle where the excess capacity will keep profits and pricing power down and make it difficult, and for many companies impossible, to service the debt they took on to overbuild. This scenario takes a lot longer and much more economic pain to rationalize. We are in the middle of a titanic battle of economic theories here. Fascinating! BTW, In my earlier post I mentioned the manifestation of inflation in housing and the falling dollar. Many believe that the equity markets have been, and still are, the most obvious manifestation of inflation.