Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: PaperChase who wrote (62609)	6/17/1999 8:52:00 AM
From: Freedom Fighter	Read Replies (1) \| Respond to of 132070

Paper, >>Negative savings and credit growth are good things, not bad.<< I kept looking for the "<g>" but I never found it. That sounds like a deadly combo to me. I guess I still don't get it. <g>

To: PaperChase who wrote (62609)	6/17/1999 9:17:00 AM
From: Mike M2	Read Replies (1) \| Respond to of 132070

Paperchase, there has been a significant slowdown in money and credit growth since the beginning of the year. In 4Q98 M3 grew at a 13% annual rate but has grown at a 5% rate for the first 4 months of the year. During the latest 13 week period M3 growth has slowed to a 3% rate. For the first 4 months of the year bank credit has actually contracted $60 billion or at a 4% annual rate about half of this decline is is due to a contraction in lending for security purchases. Mortgage refinancing volume has collapsed to about 15% of levels from last fall. Commercial and industrial loans have grown at a 1% annual rate. Consumer loans have been flat. Source : The Richebacher Letter 1217 St. Paul St. Baltimore, MD 21202 It is worth remembering that a credit bubble requires an ever increasing expansion of debt to maintain its stimulative effect of course at some point the debt burden becomes unserviceable then comes debt deflation ( tough love and economic violence) Mike

To: PaperChase who wrote (62609)	6/17/1999 10:27:00 AM
From: Ilaine	Read Replies (1) \| Respond to of 132070

You are right, I don't understand how mortgaging your house for more than it's worth and maxing out your credit cards is a good thing. My bias towards fiscal conservatism stems from the fact that I am from Louisiana, and have experienced or observed the effects of recession and deflation. I know what it means to people to have the market value of their houses decline - when you try to sell your house, you have to bring money to the table. When we moved to Northern Virginia about 10 years ago, there was a real estate boom going on. People were engaging in bidding wars for houses. No one wanted to believe me when I said that housing values can go down - people got really mad at me, or said that things like that only happened in places like Louisiana. Well, I didn't have to wait long to see it happen here. I remember what happened to Louisiana when the price of oil went down. I remember what happened to some investors when the price of gold went down. You seem to believe that stocks can only go up. Well, good luck to you.