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To: pater tenebrarum who wrote (55236)	1/8/2001 11:19:19 AM
From: Oblomov	Read Replies (3) \| Respond to of 436258

Heinz- While I agree that the ratios of debt and dollar trading volume to GDP are interesting (and currently quite ominous)statistics, I would point out that there is no economic necessity that these figures be less than or equal to one. GDP represents income, while both debt obligations and equities are components of net worth. The ratio of household net worth to disposable income has increased from 5.03 to its current level of 6.04 in 5 years. This ratio topped out at 6.36 in 2000Q1. This figure hovered slightly below 5 for most of the post war period, although it dipped to 4.13 during the great inflation of the 70s. It finally broke decisively above 5 in 1995Q4- a point that I would say was the start of the equity/real estate bubble.

To: pater tenebrarum who wrote (55236)	1/8/2001 12:02:50 PM
From: Haim R. Branisteanu	Read Replies (3) \| Respond to of 436258

Heinz, if measuring only the US you are right my point is that there is much more buying power outside the US and for a change the driving engine of global growth will come from China growing at 7% now and India growing at 5% now and to some extent from Europe. Those countries are especially high tech hungry and a year ago WS was all taken over by the potential but it was to early and higher oil prices distorted the party. Steady and lower oil prices and dollar will move the engine of growth elsewhere and international companies will prosper. At the moment psychology of the investor in the US needs some adjustment. As to the debt situation I read the Barron's article about telecom debt yes it is huge but they missed several points in their comparison. 1. Real estate needs quite expensive maintenance expenses even if it is not fully rented including taxes. 2. Telecom debt was issued also to install communication lines who need almost no maintenance and ever growing potential for wider bandwith. Their value also as that of real estate is growing with inflation. 3, The only point they were right was telecom equipment which in any case is written of over 3 to 5 years and with present population growth and very little service in countries outside the US there is a great potential for growth. Europe even has many billion in investment needed to achieve the saturation of the US. As to existing pile of debt, lowering interest rates will dampen the pain but it must be done timely. There is a huge difference between lower interest rates and injection of liquidity. IMHO the injection of liquidity well above GDP growth is the problem not low interest rates as Japan can prove it. BWDIK Haim