Comments on: Rull Bulls, Run! (A Short Chorus By Corey Thompson and The Elephant & Donkey Choir) http://www.thirstyquill.com/2009/03/12/rull-bulls-run-a-short-chorus-by-corey-thompson-and-the-elephant-donkey-choir Thu, 09 Feb 2012 20:40:04 +0000 http://wordpress.org/?v=2.6.2 By: Patrick Bobbins http://www.thirstyquill.com/2009/03/12/rull-bulls-run-a-short-chorus-by-corey-thompson-and-the-elephant-donkey-choir#comment-303 Patrick Bobbins Thu, 12 Mar 2009 17:20:57 +0000 http://www.thirstyquill.com/?p=956#comment-303 I for one believe this market has been been oversold for some time now. We are at levels on the S&P 500, that basically represent a time period of economic history that didn't have the power of the internet as we know it today. (I for one don't believe our economy is worse of now than in 1996.) One thing that still looms out there is the enormous amount of debt in our system. Back in 1996 the Debt in the system was 260% of GDP, which was the peak level that debt/GDP reached during the Great Depression. In 2007 the amount of debt in the system was above 350% of GDP. (For those of you wondering what the average level of Debt is...it's around 150-200%, on the high side) All of this debt was accompanied by a negative savings rate (2007). If you have been paying attention to the savings rate now, it has skyrocketed to ~5% in January. (A higher savings rate is good for the economy, however it will not stimulate a quick recovery.) I for one do hope that the Obama bank will help out the economy--- after all they are borrowing money at extremely low interest rates 1-2%...putting that same money into banks which are paying 8-10% on that money...and hopefully stimulating the economy with the rest. I for one believe this market has been been oversold for some time now. We are at levels on the S&P 500, that basically represent a time period of economic history that didn’t have the power of the internet as we know it today. (I for one don’t believe our economy is worse of now than in 1996.)

One thing that still looms out there is the enormous amount of debt in our system. Back in 1996 the Debt in the system was 260% of GDP, which was the peak level that debt/GDP reached during the Great Depression. In 2007 the amount of debt in the system was above 350% of GDP. (For those of you wondering what the average level of Debt is…it’s around 150-200%, on the high side) All of this debt was accompanied by a negative savings rate (2007).

If you have been paying attention to the savings rate now, it has skyrocketed to ~5% in January. (A higher savings rate is good for the economy, however it will not stimulate a quick recovery.)

I for one do hope that the Obama bank will help out the economy— after all they are borrowing money at extremely low interest rates 1-2%…putting that same money into banks which are paying 8-10% on that money…and hopefully stimulating the economy with the rest.

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