Date: 03 Feb 97 09:13:20 EST
From: jonathan flanders <72763.2240-AT-CompuServe.COM>
Subject: M-I: Overheated US Economy?


 >> A bunch of new stuff on the LBO website.

BLOATED MARKET Why the real return on stocks over the next 10 years could
 be -68%. That's a minus. The reason: preposterous valuations. An LBO 
supplement. <<Doug Henwood


Jon Flanders:

  I just downloaded this article and recommend that list members check it
out. The graph of market valuation historically looks truly ominious. Can
a serious recession-depression be far off?

  Here is some anecodotal shop evidence for our current overheated state 
in the US. As I walked in the diesel shop door this weekend, I overheard 
two superintendents discussing the serious shortage of locomotive 
traction motors currently afflicting our location. Beyond them I could 
see the area where usually twenty or more traction motors(the 7 ton 
electric motors on the axles that actually move a diesel locomotive) 
sit stacked two high in two rows. There were maybe three or four ready 
for service. Overtime crews have been installing them around the clock.
The backshop where they are rebuilt can't keep up our shop's supply.

  I remembered the look of surprise on the face of the instructor of my 
welding class several months back when I said the stock market was too 
high. He was trying to calculate his profit from Conrail's current 
inflated takeover price. As has been widely noted in the press, this 
"recovery" has gone on so long that perhaps a majority of small 
investors have forgotten the downside.

 



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