Stock market crash?
After reading a couple of books the other week
about the upcoming crash and depression, I checked out some more books on the
subject -- written in the late
80s.
Turns out the arguments pointing
to impending financial collapse are exactly the same now as then -- huge
corporate and personal debt, insane p/e ratios, low corporate dividend yields,
out of control federal budget deficits, trade gaps, and so
on.
Only they were damned poor
indicators of the 90s being a bad time to invest. If I followed the advice of
those 80s books (short the index funds, buy gold, buy plenty of put options, and
so on) I would have been plenty sad halfway up the dotcom
bubble.
Of course, those indicators are
much stronger now.
One thing that makes
me nervous now is the fact that interest rates are about as low as they can go.
They can't go lower. Which means they're going to go up. And traditionally,
higher interest rates mean lower stock market, earnings, economic growth, and so
on.
I think we could use a bit of all
those things.
Filed Fri - June 20, 2003, 11:16 PM in
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