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Strategies & Market Trends : Heinz Blasnik- Views You Can Use -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (2213)	6/9/2003 1:24:21 PM
From: Wyätt Gwyön	Read Replies (2) \| Respond to of 4904

but as long as rates are pinned by AG at zero, the valuation will be pinned where it presently is, near infinity. follow that thought to its logical conclusion--once evaluations are stretched to the point of farce, there is only one direction: down. there is no longer any prospect of a rate-drop tailwind for stocks and the economy. the best that can be hoped for is neutrality, and eventually there will be a headwind for both consumers and stock multiples.

To: Perspective who wrote (2213)	6/9/2003 2:52:01 PM
From: LLCF	Read Replies (1) \| Respond to of 4904

<Over the long haul, the relation to earnings stream gives stocks some inflation-hedge potential. And if you are short them, you can lose as the dollars you produce on the short sale are devalued away. > That assumes the stocks rally vs the devalued $. <but as long as rates are pinned by AG at zero, the valuation will be pinned where it presently is, near infinity.> 1.) I wouldn't want to have money on that. :) 2.) The fed really has little control over longer term rates... risk spread could simply explode. If corporate bonds are 1000bps over treasuries, those stocks would get creamed. DAK