Zeev's Turnips - No Politics Message Board

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Strategies & Market Trends : Zeev's Turnips - No Politics

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To: robert b furman who wrote (91564)	7/5/2002 11:31:59 AM
From: JRI	Read Replies (1) of 99280

Bob, thanks- What I don't understand about your analysis: Historically, recessions have never ended (well) without consumer debt levels getting purged and a surge in consumer savings....would make sense (right?)...the explosion/maintanence of "bullish" economic activity off a bottom occurs as consumers go from a (relative) net saver to an overconsumer (and then we start the cycle again). Funny thing is, in the last 2 years, consumers have only piled on more debt (and Fed/state gvt. gone from surplus to deficit positions). So where does the stimulus for the recovery you are envisioning come from? How can folks buy more cars when many just bought a new one (last 2 years), a new house (last 2 years, surge). I can't see how we demographic our economic way up here, the current population (and gvt.) are levered/going to be levered like never before...and we won't get into the many, many firms hanging on (in tech) for survival...who (like WCOM) are going to be laying off x thousands in next year (when a significant bounce in their biz doesn't materialize). If unemployment hit 6.5-7%, do you still see your scenario? Also, as the dollar sinks...its going to be awfully difficult to keep interest rates at currently artificially low levels... Interested in your thoughts..

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