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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Kip518 who wrote (17106)	1/19/1999 9:13:00 PM
From: Oeconomicus	Read Replies (3) \| Respond to of 18691

Kip, I hope you are right about Greenspan's view of this and further that congress listens to him. IMO, dumping a bunch of the Social Security surplus into the stock market would be a major mistake. It might be popular near term, both among the bubble blowers on Wall Street and among voters (for now), and that alone explains why Clinton would propose such a thing. The short term effect on the stock market would probably be positive, but the effect on interest rates would be negative (i.e. higher rates) simply because the surplus effectively reduces the government's demand for borrowed funds. If a significant portion of the surplus is invested in the stock market, it would cause stocks to spike to even more ridiculous valuations just when government borrowing is crowding out private borrowing and driving rates higher. Very bad. JMO, Bob