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Politics : Ask Michael Burke

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To: Eggolas Moria who wrote (50942)	3/10/1999 1:28:00 AM
From: Mike M2	Read Replies (2) of 132070

Gary, there is too much to cover in one note but some thoughts. The Japanese bubble was not global in scope. The 20's was and the current bubble is global. Some economic similarities between the US 20's and the Japanese bubble : trade surplus,strong savings, productivity, econmic growth. The current bubble pales in comparison. I have the numbers and will post in the future if you like. The current credit growth through loan securitization blows away any prior experience. If memory serves debt/ GDP ratio was 190% in the 20's we are now at 260-70% . 50% margins apply to individuals -you want to see leverage look at the hedge funds activites- especially derivatives and carry trade. Look at the derivatives exposure of the money center banks. I think the major consideration of the Fed's easy money policy was to aid the British and by the time the fed realized the bubble was underway they couldn't control it. at least they tried AG has done nothing but talk. It was Roger Babson -yes he was a bear for a long time. While there are many issues i am most concerned about the unprecedented valuation in the US market and unsustainable growth in debt.

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