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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (36800)	11/18/1998 6:31:00 PM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

Tip, I think what the author calls the slowing of M3 is really people selling money market shares to buy stocks. Yes, that is a bad indicator of an unbalanced economy, but it is not a good indicator of a business slowdown, IMHO. He is absolutely right about credit. The Fed is making it easy, but the banks are mostly taking care of old disasters, not lending to new ones. The stock market is funding the internut scams, so they don't need the banks. All other bad credits, other than derivatives, of course, are going to have to go pound sand. And that is bad for GDP and employment. So, I guess I am agreeing with his conclusion about a slowing, but I disagree that lower M3 growth is one of the reasons. I don't see how services are any more susceptible to slowdowns than basic industry. Or any less. I don't buy into that argument. He may be overreacting a bit. Gold Eagle is, after all, written by and for the bunker crowd. So, he is like an actor over emoting to an audience of frat rats at a college. He wouldn't necessarily play the scene the same way on Broadway. But I do think that these Chicken Littles are right to warn about the recklessness of the banks and the Fed. We may sneak buy without a depression, but it will be one humdinger of a recession after so much speculative activity. MB

To: yard_man who wrote (36800)	11/19/1998 10:31:00 AM
From: HB	Read Replies (1) \| Respond to of 132070

The guy says "most economists are predicting a recession". Then he goes on to claim that the last few recessions we've had aren't "real recessions"; that 72-74 was the last real one. (I find it hard to see how one can refrain from calling the early 80's anything but a major recession, with unemployment around 10%, from memory.) But, "most economists" aren't predicting a '72-74, so it's a bit disingenuous to cite their predictions of recession, then use his definition of recesssion. Like MB, I don't buy the idea that the increase in services (which are less likely to be traded) increases our vulnerability to the worldwide contractionary forces. Trade as % of GNP is about the same as it was late in the Carter administration, so the globalization arguments must have something else in mind, perhaps capital markets... Maybe the worries about credit expansion, bubble bursting, etc... are well-placed but this article doesn't do much for their credibility, since they're mixed with so much questionable stuff. Lots of people, when it comes to economics (and plenty of other things, actually), tend to believe theories that "sound plausible" and bolster conclusions they want to come to. (Like, that this bubble's going to pop, with Biblical consequences for the corrupted people who participated in it. Or, that deficits are destroying our economy, because they hate Ron Reagan, and he brought us big deficits.) I know I have a bit of that tendency; I try to resist it. It ain't science, and it ain't going to make us any money, either, except by accident. That's why I trust someone like Krugman (or MB, for that matter) more than these gold-eagle guys. You read their stuff, they says things that may be wrong, but for the most part no obvious BS. Cheers, HB