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To: Arik T.G. who wrote (600)	1/31/1999 5:32:00 AM
From: Zardoz	Read Replies (1) \| Respond to of 686

"A bubble is a bubble is a bubble" Not all Bubbles are created equal. It's the governing power behind that bubble that determines how it collaspes. In the Case of Japan it was due to deflation and irrational stagflation. In the USA the economy may grow into the bubble to fill it up, or it may burst into a fractured economy. To grow into the bubble requires a stable M2 rate, while the remaining world starts a steadt low inflation rate. Not high. The capital comes from the steady job market. Interest rates will float higher in the USA, as inflation will build. A sign of this is the GDP. PS: I think April will see a large correction anyways. 35%+-5%

To: Arik T.G. who wrote (600)	1/31/1999 8:03:00 AM
From: donald sew	Read Replies (1) \| Respond to of 686

ATG, >>>>> This mantra is one of the most silly "new era" justifications of equity valuations. I've heard it on CNBS so many times I want to puke <<<<<< Thats basicly how I feel also. I do believe that there is money on the sideline, but the question is HOW MUCH and WHEN will it come in. Until those questions are answered, the comment "MONEY on the SIDELINEs" is useless except to motivate the market to deal with abstracts and emotions. Seeya

To: Arik T.G. who wrote (600)	1/31/1999 8:45:00 AM
From: Moominoid	Read Replies (1) \| Respond to of 686

Basically the situation seems to be that younger investors are producing net saving in mutual funds and older/retired investors are doing net dissaving in directly held stocks. Foreign investors are also buying US stock (can't remember whether corporations are net buyers or sellers - Yardeni has good stuff on this). (In all investment markets) overall savers are just balancing dissaving retirees and debt increasing poorer young consumers so that the aggregate household savings rate is zero (Good recent stuff on this in Journal of Economic Perspectives). If the number of shares was constant then buyers could try to buy as many shares as they like and existing holders as resistant as they like but there would be no net saving through the stock market. Stock prices and market capitalization would go up but those capital gains aren't counted as savings. If that gain in value were tied to actual investment by firms it would be the firms doing the saving not the households. Like you I don't understand why people think money in money market funds will go into stock. Some of these accounts are tied to brokerage accounts and some not. Even when those are brokerage tied accounts the money might just as well be withdrawn than go back into stocks. (I have three MMs one in US tied to broker and two in Aus one tied to broker and one not). David

To: Arik T.G. who wrote (600)	1/31/1999 12:35:00 PM
From: Bonnie Bear	Read Replies (2) \| Respond to of 686

Arik: I took a cut at figuring out what the U.S. mortgage market is worth....I got 6.2T dollars. How much of this money is coming in from people refinancing their houses after the interest rate cut and dumping the money into the stock market? Or selling their houses tax-free and dumping the money into the market? IMHO a trillion dollars could have been created during the last year via this mechanism. But if interest rates are stable, this cash should dry up soon.

To: Arik T.G. who wrote (600)	1/31/1999 2:56:00 PM
From: yard_man	Respond to of 686

Thanks -- you put it so well, Arik. It just goes to show people will tell themselves anything to keep on believing ...

To: Arik T.G. who wrote (600)	1/31/1999 10:41:00 PM
From: TA Trader	Read Replies (1) \| Respond to of 686

While I don't necessarilly disagree with your bubble theory, I believe you are greatly over simplifying the "sources of revenue" you define. John Q Public is investing in the market at the highert % ever seen. This is in both cummulative and relative numbers. Pension, profit sharing and 401K's are pouring $ in daily. Take overs are at a record rate further increasing available funds for reinvestment. World uncertainty is driving funds to our markets. What's really happenning that few talk about or acknowledge is that the laws of supply and demand regarding equities are inverted from anything we have seen in the past. Simply put there is currently more demand than supply of equities. This won't continue for ever and all surpluses are met with supply but it will take time( as you are currently witnessing). I firmly believe that all pullbacks will continue to be met with this pent up demand and it will continue well into the 2nd quarter notwithstanding increasing volatility.