> Doug, I know there's no "musts", but is it at least true that
> this market is
> one of the biggest bubbles in history? The graph I'm using on my site
> compares today's total market cap to gdp to that of the 29.
>
> I've read that by some other measures this market surpasses anything since
> tulips. Is this true?
>
> Even if we can't say that a crash is definitely coming, at least we could
> say, "This is the most overvalued market since tulips by many measures."
> And that would be fun.
>
> -Zack
Why? Has the fundamental dynamic of capitalism been altered? Why
should valuation and sentiment readings and all those traditional
measures now be invalid? What's changed?
Doug
******* Ah, but the tulipmeister's didn't have recursive utility functions running on CM 5's and a bevy of hi-tech workers with lots of disposable $$ throwing a couple of billion bucks a month at portfolio managers for their retirement stash. So if profits crimp in the IT sector [20% of all office computers and their programs were scrapped and replaced in the last 18 months for Y2K...that level of spending and demand is not necessary in the next 18 months] and there are accompanying layoffs of those folks making 100k or more a year some of the $$ input will dissipate, triggering a different class of recursive functions....now if there's an error in the codes somewhere, a self propagating asymmetry [what worked going up don't work coming down due to irreversibility in the computations, so to speak] then things might get interesting....
Ian
>
> -----Original Message-----
> From: owner-lbo-talk at lists.panix.com
> [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Doug Henwood
> Sent: Tuesday, January 04, 2000 9:01 PM
> To: lbo-talk at lists.panix.com
> Subject: Re: thegreatcrash.com press release
>
> Jordan Hayes wrote:
>
> >He defines a crash as a 60% drop from the peak that stays below
> >50% of their peak until the end of the year. Can that happen? I
> >don't think so; today was a nice fall (those Jan 720 OEX calls were
> >down $20, but closed at $50 -- still a nice run from the $13 in
> >October), but watch for the bounce tomorrow. My only question
> >remains: where will all the cash go? Just because the market took
> >profits today doesn't mean that there won't be another few $B
> >rushing in tomorrow.
> >
> >What are they going to do, buy bonds?
>
> So by your logic, bear markets were never possible. Yet we've had
> many. Is it different now?
>
> Doug
>