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Politics : Dutch Central Bank Sale Announcement Imminent? -- Ignore unavailable to you. Want to Upgrade?

To: Ahda who wrote (15109)	8/13/2002 12:13:52 PM
From: Ahda	Respond to of 82441

Mortgage Originations To Set Record Total mortgage originations should climb to $2.2 trillion in 2002, up from the 2001 record of $2.02 trillion, Fannie Mae chief economist David Berson predicted. Refinancing originations are also expected to rise slightly, from last year’s $1.14 trillion to an estimated $1.2 trillion this year.

To: Ahda who wrote (15109)	8/13/2002 3:39:52 PM
From: sea_urchin	Read Replies (3) \| Respond to of 82441

Darleen >The people employment figures are not showing increases but the housing figures are, things are making no sense Perhaps if I make a "medical" analogy, it will become clearer. There is a condition called Congestive Cardiac Failure, heart failure, for short. What happens is that the heart is simply unable, for various reasons, to pump sufficient blood to meet the needs of that person. In turn, the circulation attempts to compensate for the weak heart by "driving" it harder. It does this through a mechanism known in engineering as "pump priming". What it does is it attempts to increase the pressure of the blood which flows into the heart, the pressure of the blood in the veins, in other words. The easiest way for the body to do this is to increase the amount of blood. What happens is the body accumulates fluid. Thus, the diagnosis of heart failure is made in a patient who is too weak to walk up steps or perform similar functions and is swollen from excessive fluid (blood)accumulation. The first line of treatment is to get rid of the excess fluid. The swelling occurs in various organs --- it can be in the ankles, the legs, the liver, the abdomen and the fluid can also "ooze" into the lungs. When that happens the patient is close to death. I think you can see the analogy. The US economy is in "heart failure". This is evident by the failure of the US to employ and to produce the necessary goods for its citizens. In turn, the economy (government, banks) has tried to drive (increase) production by increasing the amount of money in circulation. However, all that has happened is that the patient (economy) has become swollen up (investment bubbles in stocks, property, works-of-art etc). These swellings (bubbles) are seen wherever prices have risen without a corresponding increase in production or employment in exactly the same way that an increase of blood in a patient with heart failure only increases the swelling and does not assist the weak heart. In fact, and this is where the analogy becomes very serious, an excessive amount of blood/fluid in a patient with heart failure actually aggravates the condition and accelerates the patient's demise. Which is the reason why Greenspan didn't cut rates yet again --- there's already too much money in circulation and, particularly, too much debt. The problem is structural --- the "pump" is either damaged, wrongly set-up or inadequate --- and that he can do nothing about. The demands of the US people are too great for the US economy to satisfy. Put simply, the US is living beyond its means. Far beyond.