Madness of Crowds II

www.enterpriseeconomy.com ^ | 08-19-02 | brian wesbury

[john bell hood]

The bottom line is: Stocks are undervalued, bonds are overvalued, and the economy is in good shape. While things never move as smoothly as we would like, the direction of the economy and markets in the next few months seems clear. Stocks and economic activity up, bond prices down.

Excerpt. Rest of article.

[john bell hood]

The economy is growing, but the recovery isn't too solid. I still fear that bad policies from Washington could knock the legs from under it. Bush needs to get behind more tax cuts and to hack away at spending, which he and Congress have allowed to grow out of control.

[dighton]

An article that doesn't prophesy the end of the world for stocks?

I may faint.

[Bedford Forrest]

Great website! Thanks for the post. Whether it makes good political sense for the President himself to beat the drums loudly for tax cuts is a tough question. On the one hand, the token tax cut [arguably] has cast doubt on the President's committment to really effective tax cuts. On the other hand, if he were to come on hard and steady in favor of real tax cuts, going into the elections, Puff Daschle and the rest would be on the cable screens 24/7, with the usual class envy mantras about "the rich", "Medicare is being gutted to pay for this givaway to the rich", and so forth. In other words, from a political standpoint, it may be a much more complicated call than it is from an economic standpoint.

[madvlad]

Hard to justify a PE on the Dow of 25 at
this juncture even if it is early in a
recovery.

And the LEI registered a negative reading
for July. Typically, the LEI leads the economy.

Mad Vlad