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To: Cogito Ergo Sum who wrote (69546)	2/19/2001 11:26:59 AM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 99985

Kastel, One question I have with the $8000 credit card debt numbers is; does this number include cards that are used like checks and clear when it hits your account and those credit card charges that are paid off monthly with no cost of interest. During the past 15 years we have changed our way of paying for things. We use our bank credit cards to pay for everything where the establishment will accept the card. This includes groceries, etc. This card clears the account just like a check. Joan

To: Cogito Ergo Sum who wrote (69546)	2/19/2001 11:30:27 AM
From: Zeev Hed	Read Replies (2) \| Respond to of 99985

Kastel, I agree that people that pay 20% on $8,000 in CC balance have problems. My point was that a reduction in mortgage rates and car loan rates (those most directly influenced by the recent fed actions, if these impact long term rates) are much greater than the $8,000 average CC debt. As a total economy, let say that the total mortgages outstanding is $10 Trillions (I have no data on that, just a wild estimate to demonstrate the point), and the interest rate on that goes down by 1%, you have a $100 Billion injection into the economy, and directed to the majority of the consumers. That compares pretty well to the proposed $160 Billions per year tax cuts, of which possibly, $30 Billions will go to the majority of the consumers. If you assume that bank debts of corporations tied to the prime is also in the neighborhood of $10 Trillions, you have another injection of $100 B into the corporate side. And do not worry about the lenders (banks and mortgage banks), their profits are on the spread, not the actual level of rates (well, more or less), the losing side are depositors and holders of bonds and treasuries, a goodly 40% of them are "outsiders" (g), they get offered less returns. The impact on these is much smaller however because of the strange leverage banks are allowed to work on (in essence loaning depositors money n times over, depending on reserves requirements at any given time, I think I got this right, but I am not sure <VBG>.) Zeev