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To: pater tenebrarum who wrote (107679)	6/8/2001 2:29:31 PM
From: Mark Adams	Respond to of 436258

well, my GUESS is that those top income brackets are also responsible for a lot of the discretionary spending that kept the economy chugging along. My impression from the fed report is that is true.

To: pater tenebrarum who wrote (107679)	6/8/2001 2:39:16 PM
From: Mark Adams	Read Replies (1) \| Respond to of 436258

Another thought- regarding the aggregate. regarding the savings rate, the important thing about it is that in the aggregate, it is a consistent data set - and it has plunged precipitously. the history of the same data set show that that ALWAYS happens at the tail end of secular bull markets, and invariably, the savings rate turns up when the boom ends, exacerbating the recession. This may be a symptom of the way the aggregate is calculated. They take after tax disposable income, then subtract various forms of consumption. During a bull, more capital gains are booked, depressing the 'savings rate' as reported. During a bear, relatively less capital gains are booked as capital is deployed, removing the depressing effect of the capital gains tax on the reported 'savings rate'. Correlation doesn't equal causation. I think you are correct that increased savings by any quintile could act as a drag on the economy at large. I say this because I think adequeate capital exists to finance investment and expansion. If we were in an environment where good ideas could not get financing, then increased savings would form the foundation for a new investment boom. I also think this alledged 'savings rate' number has no basis reality. Well maybe that's taking things to far. It's a lousy way of keeping score- what should be tracked is household networth. Which brings up another potential insight- debt to networth ratio may have declined over the past decade while the stats show debt to disposable income has increasesed slightly.