Hi Gil. I agree with you that the Fed isn't going to do anything just because of the market. I do remember though, and it may have even been discussed in the open committee minutes earlier this year, that the Fed did express that a lowering of the stock market could well take off some of the pressure they were feeling to raise interest rates back then. Does that ring a bell with you, or did I dream it? <g>
The strength of the economy may indeed have slowed some in recent months in terms of rate of GDP expansion, but I'm not so sure it won't soon pick up again. I look at housing starts near records, high employement growth and commensurately low reported unemployment among just plain observation of people and buying locally. Not very scientific, eh? <g>
The easiest pickings for big money are going to be in fleecing all the new buyers of stock, who aren't used to severe or protracted downturns. The big guys will scare out such people at ridiculous prices and snap up their shares on the cheap. This market has gone up too long now for a lot of stockholders to remember what it's like to go down and stay down. July 1996 should have been a taste of that, and I think is a harbinger of more and worse to come. OTH, maybe everything IS DIFFERENT now and such setbacks will happen less frequently, be shallower, and over sooner! At 50 years old, I'm probably just an old skeptic, having seen this sort of thing before and being burned more than once! <g>
Sorry for going on and on, but you DID invite a response! :-)
Have I convinced you? Are you at least considering the possibility I could be right? <g>
Paul |
