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The conversion from manufacturing economy to service economy seems to have
buoyed the economy in the short run, however I am afraid it has very
negative implications for the long run. The long and the short of it is that
service economies tend to be strong in a strong economy and extremely weak
in a weak economy. In large measure the growth of the service economy has
been driven by high consumer spending and increased discretioray spending
from stock market wealth. When the equities markets do crack, the service
economy is likely to shrink radically and the US will wake up to find that
most of the manufacturing economy has been shifted off-shore. One should not
discount the possibilities that this will exacerbate the effects of a stock
market decline into a very deep recession.
Earl
----- Original Message -----
From: Paula Petersen <hotair003@xxxxxxxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxx>
Sent: Thursday, November 11, 1999 10:48 PM
Subject: Manufacturing vs Tech?
> > Wealth is being made and spent from rising stock
> > prices instead of labor, materials and products. The end
> > result will be inflation.
> >
> Good evening: My background is in the manufacturing of hard goods so I
> would tend to agree with this statement from a mainstream Options
> advisory. I'd be interested in hearing anyone's opinion about how they
> view this in relation to the future equity price levels.
> Today on CNBC they spoke with a gentleman from Internap and discussed
> that their revenue was 17 million(I believe this is correct) versus
> their stock valuation of 1 billion dollars.The commentator asked the
> CEO what could be the justification for these overvaluations versus real
> revenue and the talk of" future "profits began. The CEO had no answer
> except that the stock buyers were betting on the come.
> Just thought for discussion. If I'm jamming the network with non topics
> let me know. Many user groups nowadays are hypersensitive to topics not
> within the list jurisdiction.
> Have a nice evening,
> Paula
>
>
>
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