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

To: PaperChase who wrote (67290)	9/6/1999 1:12:00 PM
From: Skeeter Bug	Respond to of 132070

>>Historically (past 3 years), growth was fueled by wild-ass consumer lending by the Banks at a 9% increase per year, 3 times the rate of growth of GNP.<< pc, excluding chained (voodoodoo, ie, imaginary) dollars, debt is growing nearly 4 times real gdp. >>Banks are loose with their underwriting so they'll continue to increase credit card lines to customers.<< agreed. da banks won't put down the shovel until they've dug the graves for themselves and many stock market investors and tax paying folks. >>And consumers can always tap their ever-increasing stock market gains or borrow against 401K plans for bigger dollar purchases.<< the vast majority of folks (95%+?) don't borrow against 401ks, they actually borrow the 401k money and pay themselves back. if this were done on scale large enough to support retail spending then the market would get whacked due to all the outflows. the real questions are, how long can the bank of cards stand, will bubbleboy be around to bail out the banking speculators and how much will it cost taxpayers over $500 billion? anybody wonder why citibank was trading at $9? not me... a factor that investors would do well to understand is that they supply much of the motivation by bidding up the stock prices of banks beyond all reason. why? the mismanagers will try and support and raise the stock price with reported earnings. insiders sell millions of shares. after the game ends, they still keep their millions even the bank needs to get bailed out due to reckless speculation.