Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: P.Prazeres who wrote (13974)	2/8/1998 12:47:00 PM
From: Bonnie Bear	Respond to of 94695

Points to ponder: 1) This year's tax revenue, mostly from corporate taxes and capital gains, is over 20% of GDP, will probably be the largest in US history, and is the reason the feds think they will be in surplus. 2) It is vastly easier for the feds to cool down the economy after collecting taxes by engineering a decline in the stock market than it is to raise interest rates. 3) Economists in the past do not take the stock market directly into account, only the "wealth" effect. Fed studies of all past stock market booms and crashes have shown that they produce no permanently negative effects to the economy. As in the 60's and 70's, the stock market can go nowhere and we can still have a healthy and growing economy. Equity valuation is a societal preference that can change rapidly, it doesn't have much to do with underlying economic fundamentals. It's a interesting subject.