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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (65137)7/24/1999 5:56:00 PM
From: Joan Osland Graffius  Read Replies (3) of 132070
 
MB, >>Conclusion: As a nation, we are much more margined and vulnerable to a market downturn than we were in 1929.

You are correct. One point I would make is that fair percentage of our "middle class" working age people with 401K's or like accounts are living on the edge. i.e. all income goes to pay the bills on a monthly bases. What will happen if income is lost they will have to start dipping into the 401K or like accounts to meet the payment requirements. This is a double edged sword with things the way they are now..this group of people will quit spending and start drawing down the "market" accounts.

I have thought about Flecks conjecture that this market could fall under its own weight and grind down slowly. This will cause a lot of pain over a long period of time instead of seeing the BK which will cause immediate pain.

I can not see in the future, but there is a point in time where the consumer can not keep spending at increasing rates and things will slow down to a point where the current market fundamentals will not make sense on wall street.<ggg>

BTW, when I bought my first car, where I lived the banks were not lending money, using the car as an asset. One had to have "real" assets to obtain loans, like land, grain in storage, etc. <ggg>

Joan
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