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To: SliderOnTheBlack who wrote (85439)	1/26/2001 3:00:23 PM
From: SliderOnTheBlack	Respond to of 95453

Greenspan architect of miraculous productivity & the New Era ; or Hoo Doo - Voo Doo with the Fiat Presses & Reckless Free & Easy Money / Credit expansion ? From Fleckensteins SI column: <<Owe say can you see. . . With all the hype and hyperbole about said new era, here are a few sobering facts. From the end of 1994 to 2000, gross domestic product was up $2.72 trillion, corporate and consumer indebtedness was up $4.75 trillion, indebtedness in the financial sector was up $4.15 trillion, therefore total credit and debt creation was up $8.9 trillion. We can see then that debt growth was three times faster than GDP growth. More like a good old-fashioned period of printing money and leveraging it up. Not exactly what one would expect to see in a period of miraculous productivity or in a "new era." Over the same period, the personal savings rate, which is measured by percentage of disposable income, has declined from 8.7 percent into negative territory. Corporations have engineered themselves into a funding deficit as well. Of course, these figures are very rarely discussed, but nevertheless, they are real. This morning's article in The New York Times gives you a small taste of an immense problem. Just another reason why, regardless of what anyone's wishes are, the unwinding of this bubble will be an epic disaster. A point of reference. . . I'd like to share a quote that captures the speculative mood we are in: This is apparent that the public preference for stock is not only as marked as ever, but also the will to speculate is still a speculative fever not be overlooked. The prompt return of huge speculations in a liberal manner in which current earnings are again being discounted indicate that it will be difficult to quench the fires of stock market enthusiasm for long. That quote is from the Barron's trader column of March 24, 1930. The high of the post-crash bounce was on April 17, 1930, from which the market collapsed nearly 90 percent. The moral of that story is that folks shouldn't confuse the bounce that is under way with a return to prosperity -- no matter how long it lasts -- nor should they think that because the market bounces, all fundamentals can be ignored indefinitely, nor should they assume that Easy Al is going to save the day. >>