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To: Oeconomicus who wrote (131304)	9/15/2001 10:54:06 PM
From: GST	Respond to of 164684

"but history shows that it may lose little or nothing and that whatever it loses will be quickly recovered" What history is that? I cannot think of anything directly comparable. I think the odds are that we will see a substantial stock market decline on the order of another 20% or more and a slow rough recovery -- assuming nothing really bad happens from now on.

To: Oeconomicus who wrote (131304)	9/16/2001 1:21:16 PM
From: re3	Read Replies (5) \| Respond to of 164684

in barrons this weekend they mention something called the broken window concept...surely, a broken window adds to GDP, heck the person who has a broken window has to pay the local hardware store or whoever to fix it... so lets say that it costs 50 bucks to fix a broken window, and that 50 bucks is added to the GDP...why not, following along, break all the windows in the country...that will get things rolling, huh ? except the money has to come from SOMEwhere to fix these windows...

To: Oeconomicus who wrote (131304)	9/16/2001 8:12:32 PM
From: craig crawford	Respond to of 164684

>> Craig, one estimate quoted yesterday on ABC News had the incremental computer and communications spending resulting from these events at $8.1 billion. << that's about 10% of the sales of cisco, nortel and lucent. $8 billion is not even 8 hours of our gdp. i think i read that our economy builds the equivalent of a world trade center every 3 days. >> As for longer lived assets, something like 13 or 14 million square feet of NY office space was either completely destroyed or seriously damaged. Many billions of dollars. Then there's subways, roads and other lower Manhattan infrastructure. << for every industry you can point out that will benefit, i can find an industry that will be hurt by these events. >> Then you have the multiplier effect of all this spending. The people employed and the companies producing goods and services as a result of this will turn around and spend the proceeds. << how about all the lost productivity from all the extra security measures companies will have to take? how about all the money that was just sapped out of the economy while people were glued to their tv's? billions of dollars were removed in this last week as the world came to standstill. >> Then, if the military is mobilized for an extended period, goods and services will be consumed by them and the available labor pool will shrink until they return. << yes, all of this govt spending, liquidity injections, and military action is inflationary. just the thing i was warning people was on the way. >> But the fact is that wars are an economic stimulus. << true, but for the time being "war" has more of a figurative meaning rather than a literal one. politicians are using the word "war" to fire up americans, but that doesn't mean we are going to conduct a war in the traditional sense. we had a "war" on drugs, remember? now we have a "war" on terrorism. we'll have to see how much of a "war" in a conventional source it really is. >> Econ 101, Craig << yeah, econ 101. war = inflation = higher oil prices = rising interest rates = higher raw materials costs and shortages. everything i predicted is going according to plan. >> Is that a reason for the market to go up on Monday? No, but history shows that it may lose little or nothing and that whatever it loses will be quickly recovered. << i am like most americans who would like to see this as some kind of bottom forming event where our markets rally in a show of american supremacy. but are we talking about what we would like to see as patriots or the reality of the situation?