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To: GVTucker who wrote (130898)	3/26/2001 8:52:56 AM
From: Dave B	Respond to of 186894

GV, The other side of this decline is what worries me, though. It appears that a lot of the decline isn't just a flow frmo equities to cash, but rather a deleveraging out of equities. That capital just evaporates. Thus, you see things like your friend who sees a drastic tightening of credit policy. Deleveraging causes that, IMO, not just a declining market. This is where the potential pain is greatest, and where a large degree of my worry comes from. The leading edge of the baby boomers protecting their assets? I was expecting it to happen in another 3-5 years, as the 1946 babies started hitting the 57-59 year old timeframe, but I think the drop over the last year has accelerated that timeframe. And I don't think that money'll be back soon. Just a thought. Dave p.s. These are probably also the people with the most assets, on average.

To: GVTucker who wrote (130898)	3/26/2001 10:38:16 AM
From: Road Walker	Respond to of 186894

GV, re: "Which sounds like a long winded way of basically agreeing with you. I've got to stop doing that." It is very strange. We need to find a subject where we disagree, and exchange 20 notes, like the good old days. Speaking of the banker friend. It's not always the big companies that make the biggest difference. If the guy with two dry cleaners stores, that are nicely profitable, can't open a third store because the lenders commercial ROI threshold is raised, that send waves through the local economy. And from my memory of recessions, that's the kind of stuff that escalates the problems. You would think that with lower interest rates, the Fed would also be raising liquidity. Kudlow for one argues that they are not, with some statistics that I don't fully understand. But my banker golf buddy (who works for a top 10 bank) seems to confirm this. Money is tight out there, not what you would want to see to stimulate a stagnant economy. John

To: GVTucker who wrote (130898)	3/26/2001 12:39:30 PM
From: Road Walker	Read Replies (1) \| Respond to of 186894

GV, re: Credit liquidity Can you comment on the last paragraph that I put in BOLD. Do you think this is significant, and if so what are the implications? Monday March 26, 12:10 pm Eastern Time Fed says U.S. banks toughen lending, cite economy WASHINGTON, March 26 (Reuters) - U.S. banks kept toughening their lending terms in March as the economy weakened and some top-grade loans began to deteriorate, weakening chances of loan repayment, the Federal Reserve said on Monday. ``Overall, the responses indicated that business lending conditions at banks had tightened further since early January, while demand for business loans waned,'' concluded the supplementary issue of the U.S. central bank's periodic survey of senior loan officers. More than half of the U.S. banks said that ``a less favorable economic outlook'' was a key reason they had decided to impose more stringent standards and terms for lending. ``Interestingly, some respondents also commented in this context on the rapid deterioration in certain investment-grade credits,'' the survey said, using the bankers' term for loans that they carry on their books to top-grade corporate borrowers. The Fed normally issues the loan officers' survey four times a year, but said in a footnote that it has authority to conduct up to six a year. The last time it issued a supplementary survey was in 1998 when a financial crisis in Asia combined with a Russian currency crisis and U.S. hedge-fund woes nearly dried up credit and lending for a period of time.