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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Don Lloyd who wrote (15590)	2/24/2002 6:23:37 PM
From: Box-By-The-Riviera™	Read Replies (1) \| Respond to of 74559

indeed. good news may well be the worst news.

To: Don Lloyd who wrote (15590)	2/24/2002 9:03:46 PM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

<As a template for any good, including stocks, whose utility is largely in the future, the discounted present value of any infinite series of constant nominal cash flows will halve every time the discount rate doubles. This means that the lower interest rates are, the more risk is inherent in any future oriented good as interest rates increase.> Therefore, we can expect interest rate rises to very gently follow stockmarket rises and booming economy rather than a rapid increase. But I suspect that the manic-depressive serotonin uptake inhibitor mob, fueled with pineal frenzy going into spring due to increased daylight hours, will ignore pedantic details like the DCF-deduced infinite regression analysis of future-oriented goods. When they are told that the 1929 Great Depression is over and Elvis has left the building, they'll come charging out of their caves bidding like crazed dervishes. Uncle Al will have to crack the whip quite severely to tame them to an orderly mob of mass hysteria. Therefore, although a 0.5% increase has a startling effect on said DCF for heavily-indebted companies over 10 years with interest rates at the current 40 year lows, I don't think that will disaffect too many people. Uncle Al can gently raise interest rates, keeping a weather eye on the markets. By the end of the year, the 1998 Great Financial Panic and Asian Contagion, the Y2K fear, the dot.com mania, the telecosmic hyperinflation and Great Financial Collapse of 2001 will have been through the system without terrible damage [other than to those most directly affected]. Alan Green$pan will be confirmed as "If not God, then definitely related". Sure, Japan is still wobbling around, Venezuela and Argentina are bumping along, Colombia and others are not all harmony and light. But overall, where's the beef? To panic, we need something to get our teeth into [preferably grown on natural foods without hormones and stuff]. Japan has been dragged out to terrorize the mob for over a decade now. It has become like the little boy who cried wolf. Yeah, yeah, we say. But where is the real wolf? Is there one? With big, sharp teeth and baleful red eyes preferably. Mqurice