Doug Henwood wrote: > The Dow could well reach 36,000 someday, but Hassett & Glassman > thought the Dow shold have reached 36,000 very quickly after 1999. So > yes, Their argument was that markets had systemically overestimated > the risk of stocks, so PEs should have been much higher than they > were back then, at a point when PEs were extremely high. A year > later, the market fell apart and stocks were revealed to be quite > risky. So it's been disproven, massively.
the Hassett/Glassman prediction was based on the assumption that stocks were becoming as safe as bonds, no? How could that ever be true? (contrary to the MF, I think that the assumptions can be as important as the prediction.) BTW, Baran & Sweezy (1965) suggested that dividends were becoming as regular as interest payments. I think Galbraith pére may have made the same kind of suggestion way back then. If so, then stocks are more like bonds, at least for the blue chip stocks. Of course, it was only given the political economy of Monopoly Capital/New Industrial State, which soon ended. (Some argue that "monopoly capital" persists, but it's very different from the B&S version.) -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante.
