Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: AC Flyer who wrote (17040)	3/20/2002 3:39:57 AM
From: JBTFD	Read Replies (1) \| Respond to of 74559

All that Baron's article proves is that depending on how you pick your statistics, you can argue any side of the discussion. I bet the author had decided the slant of his article before he approached any statistics about the subject. I would point out that the quote from 1956 is true, in as much as our quality of life has deteriorated to the extent that 1 wage earner can no longer support a family. Now 2 parents working full time can do what one parent did working full time a generation ago. I guess I just have to say I disagree with you on this point. I think it is a sad state of affairs that, for example, these payday loan places are opening up in droves to fleece the poor working stiff at rates exceeding 300% annual rate. I dont remember seeing them around 10 years ago. That should be illegal to charge rates that high.

To: AC Flyer who wrote (17040)	3/20/2002 7:15:42 AM
From: elmatador	Respond to of 74559

"case for a US rate rise grows stronger by the week" Riksbank Published: March 19 2002 20:53 \| Last Updated: March 20 2002 11:37 Sweden may have given the world Greta Garbo and Absolut vodka. But its central bank is hardly a trendsetter. Some, such as Goran Persson, prime minister, portray the Riksbank's 25 basis point rise in repo rates as a harbinger of global tightening in a post-recession era. In fact, rates were too low, and complacency too high entering last year's economic downturn. It is true that the global recovery is drawing a line under the transatlantic easing cycle. This was signalled yesterday by the Federal Reserve's balanced outlook. With so many indicators pointing to recovery, the case for a US rate rise grows stronger by the week. In the eurozone, the rebound is more muted, and prospects of a tightening more distant. As food price comparisons ease, inflation is likely to fall this summer below the European Central Bank's 2 per cent goal, provided oil prices do not spoil the show. In the UK, unwinding last year's foot-and-mouth related price rises helped RPIX inflation moderate sharply in February. Benign inflation suggests rate rises through most of the western world will start hesitantly. Not so in Sweden, where the Riksbank is already flagging tighter moves ahead. That is for good reason. Underlying inflation has been above the 2 per cent target for 11 months. Recently, fiscal stimulus, too, has kicked in. Sweden's low 4 per cent unemployment rate is a plus - but inflationary wage pressures loom. Like Garbo - though not as seductively - it should be seen in a class of its own.

To: AC Flyer who wrote (17040)	3/20/2002 10:05:10 AM
From: patron_anejo_por_favor	Respond to of 74559

<<By the third quarter of '01, the last period for which figures are available, households were spending 7.7 cents out of each after-tax dollar to pay off their debts, a full penny lower than the peak of 8.7 cents in first quarter 1980>> In a subtle way, the author is arguing that a double dip is inevitable. If loan service has remained constant (ie, debt expanded BECAUSE rates were low from 1995-2001), then what will happen as rates rise? Answer: because ability to service loans will be impaired (barring a proportionate rise in incomes), credit will contract. The author uses circular reasoning throughout the article. He also conveniently chooses to forget that consumers fell all over themselves to take "advantage" of zero percent financing in Q4 '01, which will certainly affect the debt/income ratios adversely. Gene Epstein is a permabull economist, on a par with Larry Kudlow, IMO (that's not a compliment, FYI).