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To: Bobby Yellin who wrote (13613)	6/21/1998 1:19:00 PM
From: PaulM	Read Replies (1) \| Respond to of 116781

Hi Bobby. I don't know the exact figure, but its overall govt debt is less I susspect as a percentage of GNP (GNP before the recent slowdown that is). What isn't less is the deficits they have incurred in recent years. It seems to me its your deficits that have the potential to precipitate a short term "crisis" of govt (i..e., like necessitating shutting down the parks service to have money left over for bank bailouts;-)) , whereas overall debt levels are more a constant long term drag on the economy and drain on credit. "phsychology can chnage the fundamentals" I think Soros has a similar view. There is no market equilibriam because inverstor perception is contantly changing what equilibraim there might otherwise be. Personally. I never really bought into this. "if the consumer srarts buying" Is it rational for them to buy? Would you trade in your money if money were going up in value against everything else (deflation)? "if the banks start lending again to companies" Not until they have more to lend. Not until they have more performing loans and fewer losses. The markets way of achieving this is to liquidate lots of bad debt, i.e., to bankrupt many borrowers and lenders (inlcuding banks).