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To: Andrew G. who wrote (71277)	2/23/2001 6:27:17 PM
From: pater tenebrarum	Respond to of 436258

my point remains that there is a limit to this. you mention cash flows...that's what i'm trying to tell you...the cash flows are NOT big enough to support the credit bubble anymore. don't forget, the process of reversal has only BEGUN, with one part of the asset bubble collapsing. we will see in a few years time who survived and who didn't. there's no law that says that a company like LU or XRX HAS to survive. in fact i'm reasonably sure that if the scenario continues to play out the way it has, XRX will NOT survive.

To: Andrew G. who wrote (71277)	2/23/2001 7:05:16 PM
From: Joan Osland Graffius	Read Replies (1) \| Respond to of 436258

Andrew, >>Namely, that cashflow for consumers (or operating income for companies) rather than level of debt, is the key factor in making or breaking a financial system. The cash flow for consumers is in trouble. Most our young people have purchased and build homes in the last ten years. I do not know what % of them have participated in upgrading or first time home buyers, but I suspect it is high. This group of folks borrowed based on their budgets at the time. With the increase in utilities, i.e. electricity, natural gas, communications, cable, gas, and food; their cash flow is negative. I have not talked to one of this group that is not in financial trouble. The car payments, house payments, and credit card payments with the increase in costs of basic needs is causing problems. They are now looking to refinance their homes, but I do not know how this will work for them, because the prices of homes has been slowly inching down. Now I live in Minnesota where our natural gas for heating homes has doubled in price per unit and we are using three times the units because of the cold winter. Our cable bill increased 30%, our food costs have increased because of shipping as well as short supply of products from California. The dairy providers have cut the size of packaged products and prices have stayed the same, except for milk and butter, where they are raising the prices. Another thing is the folks my age have basically shut down spending except for basic needs. Most of my friends could spend but things are so unknown at the moment that it does not make any sense to buy something you do not need. What amazes me is that these folks on wall street do not go out in the trenches and find out what is really happening. None of this downturn surprises me. Joan