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Politics : High Tolerance Plasticity -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (18739)	2/1/2003 1:01:47 PM
From: Steven C. Vartan	Read Replies (1) \| Respond to of 23153

It would be interesting to do a history of the role of financing in aiding and abetting bubbles. For example in the distant past (pre dot.bomb bubble) the general standard for underwriting an ipo was three years of operating history and if you didn't have that you tapped relatives and the VC folks. Alas greed showed up and financing became easy for the bubble folks. In real estate to buy a home in the distant past you needed cash flow from your job to show you could service the debt and 20% downpayment. Tap mom & dad to help with the DP. Under the guise of making homes affordable for more americans (not a great favor when they file for BK) you can now borrow 110% with no money down and a decorating rebate from your federally insured builder/lender. A smart fellow from hong kong, Dr Marc Faber, thinks the recent cheap money has gone 88% to the home market and in effect has subsidzed the Chinese manufacuters who are producting major crap to the US consumer. The Chinese are also getting into the electronics commodity business in a big way which is the mega threat to INTC, etal along with puny pc demand. I may be too pessimistic but it still seems to me that it will take some time before the excesses are flushed out of the system. What could cause a very significant depression is people learning that leading a fairly simple life can be very satifying. As a positive alternative a breakout of world peace and devoting the tremendous productive resources toward the basics of food, shelter and learning for a world population could usher in a great future.