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

To: Maurice Winn who wrote (21907)	8/1/2002 2:29:45 AM
From: Don Lloyd	Read Replies (1) \| Respond to of 74559

Maurice, At low interest rates, any and all goods that provide part of their service in the future are necessarily and rationally bid up as their discounted present value increases as the discount rate falls. This would include all durable goods, as well as stocks, housing and real estate. Regards, Don

To: Maurice Winn who wrote (21907)	8/1/2002 10:24:14 AM
From: AC Flyer	Read Replies (1) \| Respond to of 74559

Mq: >>That's right, it was all Uncle Al. Those bidding had no control. They were mindless zombies controlled by the Federal Reserve employees. Each day, they had to bid more and more and more. They had no control over their mouse. Their minds were numbed by Uncle Al.<< Think about this modest little conundrum. Our hero Uncle Al is still running the printing presses as fast as they will turn, with a vast increase in the US$ money supply since March, 2000. He's doing this because he magnanimously wishes to save his ungrateful subjects from the ravages of deflation whether they appreciate it or not. But here's the point. He's still printing. The Nasdaq is down 70%. How can that be if growth in the money supply causes financial asset inflation? A rhetorical question of course. The answer is that increasing the money supply causes financial asset inflation unless it doesn't, when it causes financial asset deflation. It's just as well these lunatics (Mogambo Guru!) don't live in a country (Iraq, etc.) where those in charge feel justified in rewarding vicious libel by hanging the perpetrators from a dungeon wall by their thumbs.

To: Maurice Winn who wrote (21907)	8/1/2002 10:26:45 PM
From: Ilaine	Respond to of 74559

>>As the price rises, they trade fewer and fewer, but the whole market is repriced in everyone's head as though they are that much richer.<< Excellent way of stating this phenomenon. Mortgage rates are at a 40 year low. We just refinanced at 6%. We could have gotten a little better rate but my husband did not want to deal with companies that do not have physical offices here, and our mortgage company says they rarely sell their loans, so that made him happy. He's not an Internut like me. The economy here seems to be puttering along, not growing very strongly, but not really shrinking, either.