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Politics : Ask Michael Burke

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To: Mike M2 who wrote (34892)	10/31/1998 11:14:00 AM
From: Mike M2	Read Replies (2) of 132070

To all, I just got around to looking at last weeks Barron's 10/26/98. Some good stuff in Bob Prechter's interview. Back in 1995 in his book "At the Crest of the Tidal Wave" "... he predicted a global credit crunch with soaring risk premiums on all but the most blue chip debt, defaults by foreign gov'ts, a stampede into quality and an eventual seizing up in the global credit system. Just such a scenario has started to unfold with the Asian economic crisis, the Russian debt default last month and the widespread damage wreaked on the fixed income mkts of late by Long Term Capital and other overleveraged hedge funds." Prechter also points out that the economic fundamentals of the bull mkt which peaked in 1966 were so much stronger than those underpinning the economic expansion and stk mkt surge since 1982." Measures of debt and liquidity are also less favorable. In 1966 household liquid assets stood at 161% of liabilities today that figure is below 100%. In addition, total debt as a percentage of GDP stands at 258% as of mid 1998 compared with 148% at the bull mkt peak in 1966. I recommend reading it there are some other good points. definitely a ho ho ho . Mike

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