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To: pater tenebrarum who wrote (55232)	6/27/2000 9:30:00 AM
From: LLCF	Read Replies (1) \| Respond to of 116753

<argument as to why the Japanese stock market would inevitably go higher in spite of the outrageous valuations was 'where will all those huge savings go?'.> Also, remember, they never sell, they don't think like us, it's for there grandchildren. DAK

To: pater tenebrarum who wrote (55232)	6/27/2000 3:02:00 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 116753

nothing dictates that money MUST go into the stock market. if a recession hits i guarantee you it will go somewhere else, no matter how far the boomers are from retiring Heinz, Of course that money will go somewhere. It will go into money market funds, CDs (the interest bearing kind.. :0), and bonds. That will kick down the yields for interest bearing instruments and provide the basis for a resumption of economic growth as the cost of money goes down. But here's the kicker... If the US economy were to go into recession right now, there is no other major economy that would not be negatively impacted by it. They would likely go into recession as well since the US is the largest marketplace for their goods, and they have been deficient in restructuring their domestic markets (mainly Japan, but also applies to Europe. I'm not being ethnocentric here either Heinz. I would be FAR MORE WORRIED were I seeing structural economic changes that more favorably permit return on investor capital. But I still believe the US leads the world with regard to market transparency, credibility, and attractiveness as a safe haven in a storm. That increasing surplus certainly doesn't hurt that belief either. Btw, USAToday noted that credit card companies are including even more hidden service charges for their card users in order to make up for revenue decrease in interest income. Now why is that happening? Not because people are using their cards less, but because they are paying off their balances on a monthly basis. This is one of the hidden variables that skew the analysis by those who cite the tremendous expansion of consumer credit card transactions. IMO, that reflects the increased usage of credit cards over cash or check transactions, but does not mean that those balances are necessarily being carried over from month to month. It is just that CCs are being used instead of traditional payment methods that were never really tracked or factored into the economic analysis. So don't be fooled by these figures, or certainly don't take them to the extreme. I know people who pay their rent or mortgages with their cards in order to capture the rebates or frequent flier miles that many card companies offer. Btw, with regard to Japan, I think one of the major differences, though I don't have the data handy, is that during their boom years, their government continued to spend freely on heavily subsidized public infrastructure projects that had little ecconomic value. Thus, they squandered any budget surpluses the might have enjoyed. Hopefully, we'll get a Republican in office this time and we can take serious efforts to deal with the deficit as well as tax cuts that will maintain economic growth. Tax cuts were something the Japanese govt never really gave much considertion to.... And now they are stuck in this economic morasse with a tremendous budget deficit that will come back to bite them in the @ss within the next 5 years. Regards, Ron