Friday, May 18, 2007

The Shrinking Stock Market

Many are puzzled buy the recent strength of the US stock markets. Once again it looks like a simple case of supply and demand. In this case, less supply. USA Today reports that the supply of stocks has been shrinking due to the buyout activity of private equity ( read LBO) firms. Astoundingly, the Wilshire 5000 is no longer made up of 5,000 companies it has shrunk to only 4,910! Read the full story here.

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