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Biotech / Medical : Biotech Valuation -- Ignore unavailable to you. Want to Upgrade?

To: IRWIN JAMES FRANKEL who wrote (7035)	9/4/2002 10:53:33 PM
From: Biomaven	Read Replies (3) \| Respond to of 52153

IJ, I think we're close to the dreaded "pushing on a string" phenomenon with interest rates. I'm not sure that another 1/2 point cut in the Fed Funds rate would really do very much, other than perhaps psychologically. The long rate didn't respond at all to most of the short-term rate cuts - it is now responding primarily to the weakness in the economy. So unless the Fed does something really dramatic like buying corporate bonds I don't see that they can do much more than they are. US auto sales and housing sales seem to be chugging along merrily. Further cuts will just lend more fuel to the auto/housing boom without igniting the rest of the economy. Speaking of autos, just for the heck of it I just took a look at GM. Stock is trading not that much above cash ($45 vs $33 cash according to Yahoo) and yielding 4.4% - about the same as a long treasury. PE of 14. So it's not at all expensive on a superficial look (of course there may well be unfunded pension dragons and the like lurking in the Detroit undergrowth). It also has Hughes and GMAC tucked away in there. Peter (sell biotech, buy GM! - just kidding, I think <g>)

To: IRWIN JAMES FRANKEL who wrote (7035)	9/5/2002 4:33:08 AM
From: LLCF	Respond to of 52153

<The airlines also have huge unfunded/underfunded pension* plans. This is another cost of AG slamming on the money supply brakes> Irwin, the fed has not slammed on the money supply brakes, money growth has continued unabated since the mid 90's. IMO the fed's mistake is in the past... keeping rates way too low creating an inevitable bust. What plays out now has little to do with fed policy and everything to do with massive overinvestment of the past. In this situation lower FF rates don't translate into lower borrow cost because everyone can see there is no way to turn a decent profit with the current situation. As to airlines the government should probably have picked a few airlines to buy stock in after 9/11 and let the rest go IMO [politically incorrect of course], as this has been coming for years. DAK