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To: MythMan who wrote (178223)	7/8/2002 8:26:58 PM
From: Lucretius	Respond to of 436258

it ok i guess, but can get very oversold in an environment where rates rise after stocks get dumped and earnings estimates are so wrong liek they are now

To: MythMan who wrote (178223)	7/8/2002 8:30:51 PM
From: AllansAlias	Read Replies (1) \| Respond to of 436258

You know how I feel about the Fed model, but you may also know that I prize new information more than I prize being right. Is it not the case that this Fed Model thingie is based on data going back to the early 1980's? Why would someone smart, such as yourself, trust something that is built on data derived from only a great bull run? In other words, what on earth would make one assume that it could apply in a bear market?

To: MythMan who wrote (178223)	7/8/2002 8:37:13 PM
From: UnBelievable	Read Replies (1) \| Respond to of 436258

But The Fed Thinks SPX Should Be About 876 "Still, it may be worthwhile to consider the model's predictions for the year-end 2002 level of the S&P 500 index. Given a current 20-year government bond yield of about 5.5% and employing the end-of-sample volatility measures for stocks and bonds, the model predicts a P/E ratio of 24.1. Applying this multiple to the S&P's estimate of $36.34 for reported earnings in 2002 yields a predicted value of 876 for the index--about 20% below the current level." frbsf.org