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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Mike M2 who wrote (95968)4/18/2001 5:27:33 PM
From: Andrew G.  Read Replies (2) of 436258
 
Mike: The key factors here are:

* unemployment is still near historical lows

* the capacity to raise capital has never been greater/easier (low rates/low inflation)

* the so-called wealth effect is really tied to RE values (domestic)
which are in a perpetual state of hyperinflation
(forget the west coast, that's another matter).

These factors overwhelmingly counteract any concerns about credit excess. Incomes are rising sufficiently to keep abreast of inflation. More importantly, the highest paid are seeing much higher pay increases than inflation.

It's like a big tumor that just gets bigger and bigger. I don't doubt for a second that it's not a good thing, but it's not getting undone.

Not the Fed
Not the Public
Not corporate America
Not global market
Not anything is stopping the progression of deeper levels of debt.
So I forget about seeing all this coming to some big final "bubble burst". If it were so, it should have happened already. The tank in the equity markets IS NOT an economic fiasco if it doesn't lead to true economic changes. True changes would be a return to historic equity valuations (we are far above that), conservative spending and lending practices, and a long sour period of paying down long term debts.
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