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Technology Stocks : All About Sun Microsystems
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To: Haim R. Branisteanu who wrote (40780)1/23/2001 7:59:16 AM
From: Mike M2  Read Replies (1) of 64865
 
Haim, I would argue that the harmful psychological effects came from the new era hype glossing over the reality of unprecedented credit excesses. The wealth effect of the market has caused the savings rate to go negative, dissavings, excessive consumption as a % of GDP at the expense of investment. We have seen credit growth reach an unprecedented $4.00+ for every 1.00$ GDP - in 1929 we peaked at $2.2 . This number demonstrates that much of the credit growth has gone into unproductive uses - especially leverage. I am sure that you are aware that the private sector -personal and corporate are indebted like never before - this has been building for years. I do agree with you that the blame for the coming bust lies with AG more than any single individual but not due to tight money but because of the excesses he helped to create by his excessive monetary ease. mike
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