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

To: marek_wojna who wrote (27922)	1/26/2003 7:39:10 PM
From: Maurice Winn	Read Replies (3) \| Respond to of 74559

Marek, most Americans aren't actually in debt up to their ears. Especially with the new, low interest rates. As interest rates start rising again, just as the sun does each day, they might find debt up to their chests and rising panic as income and expenses get out of kilter. Mortgages aren't pumped up especially badly compared with incomes. Not while the low interest rates last anyway. Immigration is keeping the USA young and growing. It's not like Japan and Italy where the populations are rapidly aging and soon rapidly dwindling in number. The best jobs are the real jobs which make a profit and they haven't been lost. QUALCOMM is making heaps of profit. So is Microsoft. They offer the best jobs. Boo.com did not offer the best jobs. Serving $20 wealth effect cocktails wasn't a 'best job' either. Valuations are not all that bad, especially compared with the low interest rates as an alternative investment. QUALCOMM's profits are around $1.50 per share and rising fast. At the current $1.50 per share, $40 isn't all that expensive to buy the share. That's 4% return, which is better than a poke in the eye with a burnt stick and better than what gold returns, which is zilch. When QUALCOMM is making $3 a share in 2 or 3 years, $40 will be looking like a bargain, which probably won't be on offer. S&P 500 returns are not all that terrible now. But my point was that vast amounts of pixelation of new money is and has been going on, with interest rates slashed. People argue that that causes bubbles, meaning rapidly rising share prices. Sure, we might still be in the tail end of the Y2K bubble, but nobody is thinking we are in a period of rapidly rising share prices, driven by the liquidity, low interest rates and floods of brand new $$$s gushing out of the printing presses. There might well be quite a long way to go in bubble market clearing. But there might not be too. A LOT of companies have been all but wiped out or wiped out. There is nowhere else for them to fall. Globalstar for example has got a few more millions to wipe out, but that's irrelevant to the overall economy. What might surprise a lot of people is that Globalstar under new owners actually does very well indeed. The bottom might already be in from the bubble bust. I dare say that we can only say in hindsight that the bubble bust is over, just as we can only say in hindsight that a boom has turned to a bubble when the bust has happened. Mqurice

To: marek_wojna who wrote (27922)	1/26/2003 7:45:07 PM
From: larscot	Read Replies (1) \| Respond to of 74559

I'm in agreement with you - Subject 50782 Not a good indicator of National health. Hard to see how we'll see any growth with the daily numbers getting turned loose. These are people being removed from any economic contributions. IMHO, a percentage of these people will become greater loads on lenders and will end up being defaults and write-offs. Companies seeing increasing growth in the next 1-2 Qtrs would hold people on the payroll and accept the short-term debt, balancing off agains the cost of re-tooling and retraining. This ain't the case.... Rising unemployment, continued layoffs, gluts in inventories, reduced demand, falling dollar (repeat cycle, rinse) = depression. IMHO 03 will be baaad. Better hope major banks can pull a rabbit out of the hat, or we'll see them start taking it in the shorts too - got my eyes on JPM, a derivative nightmare just waiting for a gust of wind to bring it down. Countless others, but that ones the biggest by far. Regards, Larry