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To: James Strauss who wrote (56752)	10/30/1998 2:44:00 PM
From: AlanH	Read Replies (2) \| Respond to of 58727

Jim, re:Fed, Bull Markets, credit crunches, etc. This discussion has my curiosity piqued. There is some consensus that recent/forthcoming rate cuts are driven by debt, not the economy or stock market. Also, it's been said that liquidity is at the core of the problem. On another front, we examine stock valuations and justify historically high P/E multiples by suggesting that we're in a "new economy." The message here seems to be about supply/demand and an insatiable appetite for stocks, given JQ Public's burgeoning pocketbook. (IMO, traditional valuation models are relics -- usage has to do with gauging unmitigated lust for stock, not the relationship b/t company performance and stock price.) Examining the above (without particular concern for potential global crisis), I'm faced with a paradox: how is it that there is an apparent lack of liquidity and excess at the same time? If the breadcrumbs from debt markets cause equities to thrive, what happens when debt markets start rationing? Regards, Alan (aka, Simple Simon)