economy versus stockmarket correction, page-28

I think what Kacy says has some justification. No doubt the situation is overstated. But the problem is buying in on that basis.

Markets are valued on perception of how people see the markets. Nothing need change in the economic world for these perceptions to change.

You see this in the wild fluctuations in PE Ratios throught history. The XJO is equally valued today at 2100 as it is at 8600 on past ranges, the only variable that causes this is perception.

It does not matter how bad or how stable the housing market and sub prime mortgage situation is. What matters is how it is perceived.

At times as a few months ago the market didn't really care, now it does. The situation hasn't changed, the only issue thats changed is perception which should be periodic.

Thats where situation is. In the coming months will perception brighten or become dimmer.

Has nothing to do with the true state of the situation.