From: Reason (reason@exratio.com)
Date: Thu Aug 08 2002 - 21:55:40 MDT
--> Samantha Atkins
> > --- Reason wrote:
> > My 2c: historically speaking, the markets are way high.
> Companies average
> > P/E ratios of twice the historical average during boom-bust
> midpoints. So
> > either you believe that the effects of certain fundamental general
> > improvements in technology mean that businesses now merit this
> higher P/E
> > valuation, or you don't. If you don't, then you should act as
> if the DOW is
> > headed for 4000 sometime over the next couple of years. If you do, then
> > we're done with the worst of it.
>
>
> Good. I believe that even great technology + stupid business
> models + greed insufficiently tempered by intelligence +
> snowball effects gave us a grossly inflated economic bubble that
> is not through popping. I think it will take years to clean up
> the aftermath. Trillions of dollars of investment income, the
> very stuff essential to beginning and growing new businesses and
> the accumulated savings of the world, have been blown away.
> That has very serious and somewhat predictable consequences
Well, none of the things you pointed out above are really more than symptoms
of a bubble, IMHO. Austrian school theories are fairly compelling. You
should meander through the articles at www.mises.org. Insofar as the roots
of boom-bust cycles go, governmental manipulation of the money supply
(remember that money is just a commodity, nothing special about it at all)
is a much more convincing cause.
http://www.mises.org/fullstory.asp?control=1022
http://www.mises.org/fullstory.asp?control=1014
(As usual, two appropriate and good articles in the last five days. I really
like that site).
Reason
http://www.exratio.com/
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