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To: Lucretius who wrote (25007)	10/5/2000 4:16:43 PM
From: LLCF	Respond to of 436258

Bear Fodder: Springfield, N.J.-based economist A. Gary Shilling reports that average household credit-card debt has zoomed from $2,400 in 1990 to almost $8,000. Consumer and mortgage debt is more than 100 percent of after-tax personal income, and that leaves out stock market margin debt. Wall Street pooh-poohs the negative savings rate. It doesn't include gains from rising stocks and higher real estate values. But as Shilling points out, stock market capitalization as a percent of total economic output was around 60 percent from 1926 through the late 1990s, when it spiked to 180, recently falling back to 160. By any measure, stock market valuations are wildly excessive from a historical perspective. "The high level of debt now poses a risk," says Wynne Godley of New York's Jerome Levy Economics Institute. "If there were a big fall in asset prices or a significant further rise in interest rates, weak positions might be exposed, which could generate a downward spiral of forced selling." DAK