mattjh

Hitting Bottom Is Inevitable, Subsequent Growth Is the Real Concern

I tend to think " a muddle through economy" is what we call a sustainable economy.


On Mar 27 07:46 AM CautiousInvestor wrote:

> A very informative article that places recent market activity in
> perspective.
>
> The November lows and recent March lows were speared by fear of financial
> Amrmageddon...........and the subsequent rallies resulted from relief
> that these scenarios had been averted.
>
> Looking forward, I am not so sure the market has focused upon or
> has a handle on longer term earnings in a structurally changed economy
> in which changes in regulatory oversight and reform of the tax code
> will impose additional weight upon corporate earnings. All of this,
> of course, is layered upon a retrenching consumer, falling home prices
> and new pockets of troubled assets.
>
> After we reach an economic bottom, I think we are looking forward
> to a muddle through economy characterized by low economic growth
> and marginal corporate earnings. Should interest rates begin to creep
> up, the market will assign lower earnings multipliers to the reduceds
> earning that begin to distinguish the new financial landscape.<br/>
>