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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (5287)	8/28/2002 1:10:52 PM
From: Mannie	Respond to of 89467

Cornbread.... Here in Seattle, the public libraries are closed for a week to save money. There is talk of closing parks, or selling them off. Street maintenance goes forgotten.... Our Governor was asked if he would consider a moratorium on salary increases for public workers...his answer was that he was not sure that would be fair... ha. go ask the folks losing their jobs what is fair.... Watch Boeing, I think they are maneuvering to leave Seattle completely. duck

To: Jim Willie CB who wrote (5287)	8/28/2002 1:16:56 PM
From: pogbull	Read Replies (1) \| Respond to of 89467

Another interesting piece of that same article: Debt continues to grow even though 257 public companies with $258 billion in assets defaulted last year and went bankrupt. Household debt, corporate debt and credit market debt is now almost $30 trillion. That is 2.9 times GDP with far less collateral compared with previous recessions. The current account deficit is 5% of GDP and savings are 4-5%. The government says inflation is 1%. We say its 6%, but deflation is on the way. We see prices continue to fall for goods. Some services have held and some have moved higher. Goods prices are at a point that we believe consumers will wait for even lower prices. That is what has happened in Japan. They have had lower prices for 33 months and there is no end in sight. The Japanese have one advantage: they are big savers and that is what probably has kept them from falling into deep depression over the past 10 years. Our low savings puts us very much at risk for deflation. We have low interest and mortgage rates, which continues to liquefy the consumer. The problem is those loans they are taking out represent 105% of equity. Once house prices fall some owners will have serious problems. Debt problems are super serious. At the top of the bubble household debt was 72% of GDP, today it's 79% of GDP. What professionals refuse to recognize is that the problem is systemic. It is not going to go away like in other recessions. This is a 1929 scenario. One very interesting phenomenon we are seeing in the market is that investors are taking gains instead of letting them run. They have been offsetting losses for the past two months. That is why it is very important that Congress cancels capital gains taxes and lets investors take $20,000 in losses giving them less taxation. Better yet let them write off all the losses they can. The market cannot launch any kind of sustained rally with funds leaving the market, foreigners selling and funds with 4.4% in cash. They need the cash for redemptions. Investors' ownership of stocks has dropped as a percentage of financial assets from 46% in 3/2000 to 35% today, which is still way above the 50-year norm of 24%. Then there are derivatives. Once one major counter-party goes under the whole house of cards will fall. It's only a question of when?

To: Jim Willie CB who wrote (5287)	8/28/2002 1:51:06 PM
From: SOROS	Read Replies (4) \| Respond to of 89467

Since I'm "moody" today, I'm downgrading the entire world. I'm taking it from a AAA+++ to a FFF---. Man has had 6000 years and completely screwed up. The USA has made the best attempt yet, however, when they created the Fed, they set in motion complete failure in the future. Well, the future is now, and with the very poor sentiment being only held in check by extreme prescription anti-puking drugs, all you-know-what is about to hit the fan. I am making a once a year call here. Can anyone else feel the sentiment being BARELY held in check? When it goes, it's going to be one giant upchuck, and I think it will happen in the next 3 weeks -- maybe the next 5 days. I, for the first time, have actually heard a few "wallstreet diehards" utter things like, "I'm not going to be the last one out if things go bad." This is swelling, I tell you. People's guts are really churning now. It won't take much to set off the tidal wave of fearful vomit. Could be my arthritis, but my bones are really foretelling a watershed event soon. I remain, SOROS