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To: Michael Collings who wrote (45005)	11/14/1999 1:43:00 PM
From: Mark Bartlett	Respond to of 116756

Michael, Good comments - as you said,tough to predict the time frame, but not the event. There are just too many people\institutions\entities hanging out there bare as__d. When the credit crunch comes, there will be no where to hide. MB

To: Michael Collings who wrote (45005)	11/14/1999 4:12:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 116756

The broad money supply (m3) has been increasing at a faster clip, around 11% (annualized)in the last two months. While M2 growth has been in steady decline since January. In fact, it is back to where it was just before LTCM collapsed, if not lower. briefing.com bog.frb.fed.us Consumer debt equates to 98% of income. Define consumer debt. Does that include home mortgages? Credit card debt? Well credit card debt drawing interest is down: ramresearch.com Margin debt is around 179 billion or 1.2% of GDP. Personal savings remains negative. As compared to "impersonal" savings? Do retirement accounts qualify as "personal savings"?? We continue to see record trade deficits, the cumulative number is upwards of 2 trillion. Yes... at the same time that the US economy grew from 20% of global GDP to 33% as a result of the Asian "contagion". With recovery in Asia, that trade deficit will decline as they grow able to buy more US goods. Our equity markets have increased in capitalization from around 5 trillion to over 15 trillion in just six years. Where has that money come from? Surely people aren't just going to the bank and obtaining non-collaterized loans to throw into the market, are they? Could it be that people are making more money and putting more of that income into retirement accounts? Could it be that corporations are matching their contributions?? Markets don't grow without people possessing the money to throw into them. The question is whether or not money is coming to the US because it provides the best return, or because investors deem the rest of the world too risky for investment? That has created a huge wealth effect and credit binge as home equity has declined in that same period to a record low. 125% home equity loans are being advertised and there will be a day that we look back on that and shake our heads at the stupidity of it all. No disagreement there... 125% mortgage loans are the height of stupidity. But people need homes due to the demographic growth drives in the US economy. I don't believe these Ditech home loands are federally guaranteed, so the risk is upon the banks that back them. We have reached the point where all this credit will start to unwind. You need only to watch the erratic behavior of the credit markets and the spreads. Could it be that these nasty swap spreads are the result of an unwillingness to take on debt risk in advance of Y2K?? There has been a large quantity of cash sitting on the sidelines out there, that only in the past couple of weeks is finding itself back in the marekts. There are people who have converted cash to gold, thinking the world is coming to an end. That "value" will be reconverted back into cash and re-invested in other assets should Y2K pass by with hardly a notice here in the US (I don't believe Asia and Europe will be able to expect a similar positive outcome) But overall, you don't agree with my analysis, and I don't agree with yours. Debt is future wealth realized in the present (for a price premium). When that wealth realization outpaces reasonable expectations for future income, then it becomes a major problem. Thus, with the rest of the world still mainly in recession, it seems fairly reasonable to assume that once they are back on track economically, that US growth expectations will be maintained as they can afford our services. Regards, Ron