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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Mike M2 who wrote (131102)	10/25/2001 2:25:25 PM
From: marginmike	Respond to of 436258

she's Italien she wont get it-g-

To: Mike M2 who wrote (131102)	10/25/2001 6:53:00 PM
From: yard_man	Respond to of 436258

Comstock guys make some good pts tonight the rise in mortgage deliquency is occuring at a time of very low rates, too. They are right about fiscal stimulus, too -- where's it going to go -- down a rathole -- it's already gone. mm may rush out and buy XP, but there's a whole bunch of outfits for which XP or not -- is not only a no-brainer -- heck, it ain't even on the radar screen. >>Watch Out For All That Debt The market, today, pushed upward through a slew of horrid economic news as investors are assuming that some of the weakness was temporarily exacerbated by the terrorist attack and that monetary and economic stimulus will lead to an early 2002 rebound. To be sure, the economy came to a virtual standstill for some days immediately after September 11th, and a partial return to normal activity will result in a bounceback in the segments most adversely affected. The economic slowdown, however, was well under way for more than a year prior to the attack as a result of the severe imbalances developed during the economic and financial bubble of 1998 to 2000, and these imbalances are a long way from being corrected. These include the vast overexpansion of technology capacity, the huge trade imbalance, the inability of reduced corporate cash flow to support even the current lower level of capital expenditures, record levels of consumer and corporate debt and the historically low consumer savings rate. These imbalances, which have not been corrected, will continue to offset efforts by the authorities to boost the economy through simulative monetary and fiscal measures. Furthermore states and localities are finding themselves in a severe fiscal bind that is being made even worse by measures to protect the populace from various forms of terrorism. If these entities have to reduce expenditures or increase taxes by a combined average of 5%, the result would amount to a $50 billion offset to any fiscal action taken by the Federal government. The amount of the debt overhang in the U.S. is likely to restrain growth for some time to come. Total private debt to GDP is now a whopping 152% compared to 87% in 1960 115% in the mid-80s. This includes household debt, which is 100% of disposable personal income and corporate debt, which is 48% of GDP. All of these are at all-time highs. Similarly, consumer installment debt is at a record 21%, and has not yet pulled back as it normally does during recessions. At the same time the consumer savings rate is at the lowest level in 68 years at a time when job layoffs are rising sharply and consumer net worth is down 15% over a year ago, the sharpest drop in more than 41 years. It is also noteworthy that delinquency rates on mortgage payments are at 4.5%, the highest in nine years. In our view, reducing these huge debts levels at a time of sinking cash flow, rising unemployment and declining net worth will put a severe restraint on both corporate and consumer spending for a long period ahead, resulting in a longer and deeper recession than most expect. We therefore regard the current market rally as highly suspect, and believe that another big downleg is imminent. <<