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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (6372)	9/6/1998 4:23:00 PM
From: Doug	Read Replies (1) \| Respond to of 18016

Pat: AG is a very pragmatic economist with a keen sense of history. At the current levels of public expenditure and w/o its global market, the U.S will have a negative GDP growth. Near ten percent of the U.S Economy is export oriented. It is exactly this sector that provides the GDP growth. To maintain that growth, the U.S needs the world. The situation is identical in Japan and Germany. The main reason for our long economic cycle has been the promotion of the free trade concept and taking down of economic barriers on a global basis. Unfortunately , the flood of Capital also opened the gates of excesses and corruption. The Countries affected are now trying to experiment with some form of a Middle path , one with controls. It may be early to make a call. However, if you consider the case of India which always had some control they have faired better. In fact their stock market is the only one still +ve for 98. I see some increase of Controls on a global basis. In the long run that will be good for every one. In the short haul, we are likely to see a slowing down in the U.S Economy which means a reduction in the GDP growth rate. I still think a 1.5%growth in the GDP is quite good. The big concern will be the markets valuation. I think a maximum of 7% return on Equity is fair and reasonable under such circumstances.