John Authers on whether stocks are compellingly cheap

http://www.ft.com/cms/bfba2c48-5588-...

See may 11th through may 14th for a view on stock pricing , very interesting videos some of it confirms your arguments about the value of stocks not being cheap anymore but as for earnings expectation they argue the markets have been over pessimistic previously and could have caused the recent raly .

I would still argue that the market has not yet fuly accounted for the stimulus package because the money has not yet hit the streets , when it does unemployment numbers will be affected positively earnings will show sign of growth , consumer confidence will also react positively and cause a rise in consumption and oil prices will surge affecting the markets positively as well .

The only money that hit the streets so to speak so far has been the TARP and that affected the financial institution and credit in a mild , yet positive manner reinforcing the recent raly . If infrastructure program get on their way this summer it should have a positive impact on the markets over the course of the summer , it all depends on how fast or slow the $837 billion dollars strart trickeling into the economy , so far it seems to be encountering a lot of resistance from the usual " hurdles " some of wich are administrative , others political .

For those unemployed and on the brink of loosing their home ( nearly 1.5 million or so ) that money could not come too soon especialy after they paid their income taxes and other dues to the govts. and society as a hole for a number of years . But in Canada as in the states the money is also slow in reaching the people and city mayors recently complained about it fearing our short summer will end up before the promised money can be used for infrastructure purposes .

The good news on our side of the line is the economy does'nt seem to suffer as much yet depending on the part of the country you live in , still 2 days ago the globe & Mail reported that steel products from Canada suffered the same kind of problems the Chinese steel encoutered caused by the nationalistic resurgence caused by the buy American act . and considering the extent of our trades with the US , this kind of reaction will sooner rather then later cause some real problems to our economy as well .

In this kind of environment protectionism is the greatest danger that looms ahead for world economy it could trigger a chain reaction causing major disruption in world trade and then the word DEPRESSION might take all it's meaning for real people i don't mean the ragged dolls sitting idle in their chairs on wall street and it's derivative alleys .