Altes Elliott-Wellen-Forum - "Valuing Wall Street" von Andrew Smithers and Stephen Wright

Luke

17.11.2000, 17:49

"Valuing Wall Street" von Andrew Smithers and Stephen Wright

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<center>Executive Intelligence Review am 3. November 2000:

"Smithers: Asset Bubble is worse than 1929

British consultant Andrew Smithers, head of London`s Smithers & Co. Firm, told EIR on Oct. 20, that the US equity market is now"probably three times" what it should be, and that this"is very frigthening, much worse than the asset bubble of 1929. He stressed that"a good central banker would do anything posssible to avoid an asset bubble", but US Federal Reserve Chairman Alan Greenspan has done exactly the opposite, creating"the worst asset bubble in modern history."

Smithers concurred with EIR`s assessment, that Greenspan has allowed an excessive expansion of money supply, and seems anxious to keep the stock market from collapsing. He wishes, perhaps, to avoid going down in history as the man whose policies led to a major crash. But, paradoxically, he noted,"the more Greenspan postpones the crash, the worse the eventual crash will be, because of the massive build-up of debt."

Smithers recently co-authored a book, with Cambridge University economist Stephen Wright. In the Oct. 20 discussion, he stressed that"the asset bubble has driven down savings. The household sector is not saving, and the cash deficit of the US private sector is 6 % of GDP. The growing deficit on current account, is financed by vast flows of debt: The debt is expanding, because the bubble is, necessarily, debt-financed." He noted that lenders are becoming"increasing nervous," as seen in Europe, over the telecom sector, and the pressure by European banking regulators on banks, because of the increase of telecom debt. In the United States, Deputy Comptroller of the Currency Nancy Wentzler recently predicted that this year would show a 50 % increase in banks delinquent commercial loans.

Smithers noted, that in both the United States and Great Britain, the major buyers of shares are companies, which is why the debt is rising so rapidly. Respecting the UK, he has recently co-authored a report, entitled"Britain: The Worlds Largest Hedge Fund", in which he shows how Britain has become an enormous beneficiary of the asset bubble. He said,"We are almost a mono-economy. As with the Saudis and oil, so it is with us and financial services. As the Americans would say, we have been living high on the hog, from the asset bubble. We are, actually in far worse shape than is being acknowledged. The current account is being held up, despite a massive trade deficit, because of the very big income from abroad, which comes from financial services. Meanwhile, we have negative extermal assets. Such a situation cannot go on for long."

Abschliessend noch eine Grafik, die die wirtschaftlichen Ungleichgewichte in der USA schön verdeutlicht:

[img]" alt="[image]" style="margin: 5px 0px 5px 0px" />

Gruss

Luke

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dottore

17.11.2000, 18:02

@ Luke

Re:"Valuing Wall Street" von Andrew Smithers and Stephen Wright

>Hier ein Artikel zu obigem Buch, erschienen in dem Wirtschafts- und Nachrichtenmagazin Executive Intelligence Review am 3. November 2000:
>"Smithers: Asset Bubble is worse than 1929
>British consultant Andrew Smithers, head of London`s Smithers & Co. Firm, told EIR on Oct. 20, that the US equity market is now"probably three times" what it should be, and that this"is very frigthening, much worse than the asset bubble of 1929. He stressed that"a good central banker would do anything posssible to avoid an asset bubble", but US Federal Reserve Chairman Alan Greenspan has done exactly the opposite, creating"the worst asset bubble in modern history."
>Smithers concurred with EIR`s assessment, that Greenspan has allowed an excessive expansion of money supply, and seems anxious to keep the stock market from collapsing. He wishes, perhaps, to avoid going down in history as the man whose policies led to a major crash. But, paradoxically, he noted,"the more Greenspan postpones the crash, the worse the eventual crash will be, because of the massive build-up of debt."
>Smithers recently co-authored a book, with Cambridge University economist Stephen Wright. In the Oct. 20 discussion, he stressed that"the asset bubble has driven down savings. The household sector is not saving, and the cash deficit of the US private sector is 6 % of GDP. The growing deficit on current account, is financed by vast flows of debt: The debt is expanding, because the bubble is, necessarily, debt-financed." He noted that lenders are becoming"increasing nervous," as seen in Europe, over the telecom sector, and the pressure by European banking regulators on banks, because of the increase of telecom debt. In the United States, Deputy Comptroller of the Currency Nancy Wentzler recently predicted that this year would show a 50 % increase in banks delinquent commercial loans.
>Smithers noted, that in both the United States and Great Britain, the major buyers of shares are companies, which is why the debt is rising so rapidly. Respecting the UK, he has recently co-authored a report, entitled"Britain: The Worlds Largest Hedge Fund", in which he shows how Britain has become an enormous beneficiary of the asset bubble. He said,"We are almost a mono-economy. As with the Saudis and oil, so it is with us and financial services. As the Americans would say, we have been living high on the hog, from the asset bubble. We are, actually in far worse shape than is being acknowledged. The current account is being held up, despite a massive trade deficit, because of the very big income from abroad, which comes from financial services. Meanwhile, we have negative extermal assets. Such a situation cannot go on for long."
>Abschliessend noch eine Grafik, die die wirtschaftlichen Ungleichgewichte in der USA schön verdeutlicht:
>[img][/img]
>Gruss
>Luke

Schönen Dank, Luke,

aber der Hinweis auf Buch und q-Faktor (erfunden von James Tobin) wurde hier schon vor Monaten reingestellt. Hoffentlich haben es rechtzeitig genügend Leute gelesen. Hat viel Geld gerettet!

Alles kommt, wie es kommt.

Gruß

d.

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Luke

17.11.2000, 18:12

@ dottore

Re:"Valuing Wall Street" von Andrew Smithers and Stephen Wright

>>Hier ein Artikel zu obigem Buch, erschienen in dem Wirtschafts- und Nachrichtenmagazin Executive Intelligence Review am 3. November 2000:
>>"Smithers: Asset Bubble is worse than 1929
>>British consultant Andrew Smithers, head of London`s Smithers & Co. Firm, told EIR on Oct. 20, that the US equity market is now"probably three times" what it should be, and that this"is very frigthening, much worse than the asset bubble of 1929. He stressed that"a good central banker would do anything posssible to avoid an asset bubble", but US Federal Reserve Chairman Alan Greenspan has done exactly the opposite, creating"the worst asset bubble in modern history."
>>Smithers concurred with EIR`s assessment, that Greenspan has allowed an excessive expansion of money supply, and seems anxious to keep the stock market from collapsing. He wishes, perhaps, to avoid going down in history as the man whose policies led to a major crash. But, paradoxically, he noted,"the more Greenspan postpones the crash, the worse the eventual crash will be, because of the massive build-up of debt."
>>Smithers recently co-authored a book, with Cambridge University economist Stephen Wright. In the Oct. 20 discussion, he stressed that"the asset bubble has driven down savings. The household sector is not saving, and the cash deficit of the US private sector is 6 % of GDP. The growing deficit on current account, is financed by vast flows of debt: The debt is expanding, because the bubble is, necessarily, debt-financed." He noted that lenders are becoming"increasing nervous," as seen in Europe, over the telecom sector, and the pressure by European banking regulators on banks, because of the increase of telecom debt. In the United States, Deputy Comptroller of the Currency Nancy Wentzler recently predicted that this year would show a 50 % increase in banks delinquent commercial loans.
>>Smithers noted, that in both the United States and Great Britain, the major buyers of shares are companies, which is why the debt is rising so rapidly. Respecting the UK, he has recently co-authored a report, entitled"Britain: The Worlds Largest Hedge Fund", in which he shows how Britain has become an enormous beneficiary of the asset bubble. He said,"We are almost a mono-economy. As with the Saudis and oil, so it is with us and financial services. As the Americans would say, we have been living high on the hog, from the asset bubble. We are, actually in far worse shape than is being acknowledged. The current account is being held up, despite a massive trade deficit, because of the very big income from abroad, which comes from financial services. Meanwhile, we have negative extermal assets. Such a situation cannot go on for long."
>>Abschliessend noch eine Grafik, die die wirtschaftlichen Ungleichgewichte in der USA schön verdeutlicht:
>>[img][/img]
>>Gruss
>>Luke
>Schönen Dank, Luke,
>aber der Hinweis auf Buch und q-Faktor (erfunden von James Tobin) wurde hier schon vor Monaten reingestellt. Hoffentlich haben es rechtzeitig genügend Leute gelesen. Hat viel Geld gerettet!
>Alles kommt, wie es kommt.
>Gruß
>d.

Hi dottore,

auf Grund des Hinweises damals habe ich mir das Buch auch gekauft und ich habe jede Seite genossen. Obwohl es schon mal früher hier besprochen wurde, bin ich der Meinung, daß der Beitrag für Neulinge im Forum wichtig und für alle anderen auch von Interesse ist.

Gruss

Luke

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