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To: pater tenebrarum who wrote (56047)8/11/1999 1:57:00 PM
From: Investor2  Read Replies (1) | Respond to of 86076
 
Re: "I2, we should indeed worry about the possibility of weakness in the economy in the not-too-distant future. a rise in rates will ultimately put pressure on stock prices, ..."

I guess the problem I'm having is trying to figure out how interest rate can possibly undergo a sustained increase at the same time the economy is weakening.

Re: "... and that it is o.k. to take on debt essentially beyond one's means since the perpetual rise in stock prices guarantees the debts won't become a problem."

I agree that common knowledge today is that it is OK to take on debt beyond one's means. However, the cause must be something other than the perpetual rise in stock prices, since even people who don't own any stock are taking on excessive debt. If fact, the problem may even be more rampant in the non-equity owner crowd.

Best wishes,

I2