Zeev's Turnips Patch-No Politics (ZEEV)

[pstuartb]

Zeev - thank you for the reply. Your position on this issue has been consistent for many months. My own take, fwiw, is not as optimistic. Several months ago, you made the same argument regarding the bolus (love that word) of federal spending that would provide a bump to the consumer towards the end of this year. We are now nearly at the end of the year, and that federal stimulus has been in the works for at least 6 months or so, but the consumer seems to be getting weaker, not stronger. It seems possible that the federal spending has allowed consumers to levitate a while longer, but I have to doubt that the boost will be enough to induce a cyclical bull. The recent fall in auto sales seems like the biggest tell to me. I believe you view the current consumer weakness as part of the double-dip that was priced in months ago. It's also my understanding that your expectation of a cyclical bull in early 2003 is premised primarily on this federally-induced rise in consumer spending, which in turn may seduce additional business spending. Again, though, if the federal stimulus early this year was powerful enough to induce that kind of spending, I would think we would have seen the positive effects by now. Just my opinion, and yours is more informed than mine, but I've got to place my bets based on my own (g).

Regards,

Paul