Dear Editor,

In regard to the recent editorial by Sam Stovall, Chief Investment Strategist for Standard & Poor's (Outside the Grid, July), I believe this technical piece missed a key point. Most Americans, media writers, and even experts confuse securities prices with the economy. The economy does not have any relationship to short-term securities price changes.

It is securities prices that have had the 49 pull backs, 16 corrections and two big sell-offs cited by Stovall. But the economy gained during each pull back/correction. In fact, the economy grew all five years of the 1973, 1974, 2000, 2001 and 2002 big sell-offs.

Stovall explains it is typically a matter of months before markets recover from minor fluctuations, and perhaps a few years for large sell-offs. But here is the essential point missed: Why did the securities market recover? Securities prices recover from an undervalued state relative to corporate growth/earnings because corporate growth/earnings/GDP never went down in the first place. The GDP/corporate earnings grow every year; it is only securities prices which become undervalued, and when they subsequently return to their appropriate valuation, they create the appearance of a recovery.

F. Patrick Cunnane (CIMA), Managing Principal
Wachovia Securities Financial Network, LLC office

(Editor's Note: The article in question did, in fact, differentiate between the economy and the markets, but On Wall Street appreciates and welcomes all viewpoints on any article in the magazine.)

Dear Editor,

In regard to your ETF feature (The ETF Parade Keeps Marching On, August), it stated that MacroShares had a pair of oil funds that were closed. The article stated that they "were created with a kind of self-destruct mechanism that triggered a termination clause when the price of oil hit $120 a barrel."

True, MacroShares closed it first generation oil funds but what your article did not mention was that even before these funds were closed, MacroShares had already planned on launching a second generation pair of oil funds. They were in registration and designed to allow investors access to the oil market even at its increased level, far beyond what existed when the first two funds were launched.

Diane Masucci, Director
MacroMarkets