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To: jbn3 who wrote (38476)	4/21/1998 1:57:00 AM
From: Chuzzlewit	Read Replies (2) \| Respond to of 176387

Good evening Bachman. Some general thoughts regarding money flows and valuations. There is a relationship between long-term interest rates and pe ratios. In addition, we are seeing near-perfect conditions for a sustained economic recovery. The economic problems of Asia and the precipitous drop in oil prices have spared us from the seemingly inevitable inflationary precursors to interest rate hikes this late in the economic cycle. This confluence of economic factors clearly favors equities as wealth-generating vehicles. As I see it, so long as Rubin and Clinton and Greenspan can maintain the kind of economic climate we currently have, we will see continued cash flowing into the market. Therefore, the only surprise that I see is that interest rates are as high as they currently are. This is a long-winded way of saying that the cash inflows that we see coming into the stock market are a consequence of the larger economic environment, not a the cause of the market going higher. They are just the intermediate mechanism -- the nexus between real wages and investments. TTFN, CTC