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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: pater tenebrarum who wrote (95909)4/18/2001 5:04:19 PM
From: Andrew G.  Read Replies (3) of 436258
 
Oh, Heinz. You no doubt have more stats at your disposal. But it's the reasoning that I question.

Here's a perfect example of the persistance of small companies with enormous debt that are now rallying :

biz.yahoo.com
Wednesday April 18, 4:33 pm Eastern Time
Akamai posts $2.2 billion first-quarter net loss
AKAM is a leading gainer in AH. up over 11% on THIS earnings report.

Where does the debt level end ? Do you think Akamai is going to have trouble raising more capital ? Probably not. Even though market cap is 1/15th what it was a year ago.
Look at the aliances they are making despite falling off demand. Won't be long before they start getting analysts Buy reco's.

It's disgusting, I know, but the New Economy is about a bottomless pit of debt and how it can go on ad nauseum: as long as debtors make their minimum monthly debt payment.

You can fuss 'til your blue in the face about how debt level charts and negative savings are going crazy. It doesn't matter because they will just get more and more extreme.

BTW, if I turn out to be wrong about this and we do hit a major bubble burst (ie a depression) than I will quickly admit my misjudgement and praise yours.
However, I don't see any 'bubble burst'. A recession, yes, even likely.

I see no change in consumer or corporate borrowing/savings habits.
And the Fed is making sure that their habits remain unchanged by encouraging further borrowing and spending.

In this country materialistic consumption is top priority. If you can't afford it, you buy it on credit.
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