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To: Ilaine who wrote (96624)	4/19/2001 9:59:07 PM
From: Mark Adams	Respond to of 436258

I can see that- as times improve people are willing to take on more debt to finance various desires, both consumption and investment. During hard times, people save to shelter against potential losses in the event of the unexpected. Somwhere I'd read that the current debt may be more problematic for the newly employed and younger people with less experience with hard times. My youngest brother for example, slipped into the construction trade at 18 and is now at a journeyman level, making $21 an hour (after 3 years work). Never homeless, never having to choose between food and rent. I, on the otherhand, lost out on a dishwashing job in '81 to someone with a four year degree. You might say my awareness of potentional hardship encourages me to save, whereas my brother spends every spare penny on tools of the trade and pleasure, saving little if anything. I bring this up, as hardship in the future will teach a new generation the importance of cash & savings during difficult times. My hope is that such times can be avoided, of course. <g>

To: Ilaine who wrote (96624)	4/19/2001 10:29:41 PM
From: JRI	Respond to of 436258

<Debt rises during contractions...> Totally counter-intuitive.....but I guess it means the economic cycle waves are pulled in both directions to make big waves (ups and downs)...and, I would argue, longer waves...than what would normally happen... I think there is a real underestimation of the length of this down-wave (L-shape)...I am a Stephen Roach-er on that......negative savings rates are going to take a long time to turn back positive... This summer, the psychology break (in consumer, into a spending mode) will be sharp, IMO