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Strategies & Market Trends : New US Economy Policy -- Ignore unavailable to you. Want to Upgrade?

To: Arthur Tang who wrote (83)	11/25/1997 12:13:00 PM
From: Arthur Tang	Read Replies (1) \| Respond to of 435

The new economy and the banking system being consolidated? Recent mergers and acquistion will choke off liquidity provided by the multiples of overnight discount system. Fewer banks eliminate the correspondence banks with their compensating balance in the regional banks and other commerce banks, etc.. When the land development projects come back, after many years of over supply of housing, the lack of leverage of liquidity will restrain the efforts of any housing development whether they are low income or condo or luxury housing. Small local banks of 1-2% capitalization will have to be setup to service land development projects based on population needs. Assets of the nature of stock equity, real estate, or bonds; require substantial liquidity to maintain a growing population with a high standard of living. Any thing that isn't planned correctly will initiate a boom and bust cycle. So far the new economy has been able to do it just right by tightening and losening liquidity through some of Feds functions but mostly through job growth by "obsolescense and replacement" economy, by way of mass distribution. So much for that, next year we expect land development will be the essence of this new economy. The lowering of mortgage interest rates created an opportunity. Americans will continue to get rich by buying their residence and have their cake and eat it too.