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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Lucretius who started this subject2/28/2001 6:43:13 PM
From: Box-By-The-Riviera™  Read Replies (2) of 436258
 
Where did AL's money go???????????

Here's an interesting exerpt from Richard Russell:

I received this very insightful e-mail yesterday, and it's worth a careful reading.

"You made the observation that the fed is lowering interest, flooding the country with money and credit. But the Fed can't create credit. It has lowered interest and has created money in huge amounts. But the credit picture is going the other way. Credit is shrinking, not expanding.

"I know senior officers in every major bank in Chicago. They are all saying the same thing. When the economy was booming, big companies didn't need banks as they could go into the market with debt instruments and get credit easily.

"As a result, the banks had to make loans to entities with lower credit ratings in order to maintain their interest income levels. These loans are starting to come apart. As a result, all of these banks are tightening credit - not loosening. Their fear is that current loans less reserves will not be enough if the economy goes into the tank - and for some of their customers that is already happening.

"The Fed can print all the money it wants. The banks will not be using it to make loans. In addition, as rates drop, mortgages are being refinanced and interest income is declining further. The bankers are far more concerned than anything you have read about would indicate."

Got bank puts??
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