Marc,
<<Great, now Green mouth is not only discouraging US investors but causing a worldwide move out of US equities. I kind of thought Bob might be overdoing it on Greenspan last weekend but the above comments in your post are scary.>>
I agree with you. I don't blame him for not wanting to preside over the creation of a bubble, but if that is indeed his concern, then he is "pricking" it in the wrong way, as I think has been said on this thread many times. First, there is no bubble in most stocks. For some reason that very salient fact seems to be continually ignored, at least by Fed governors. And what bubble there is can be alleviated soon enough with tighter margin rules. I haven't seen this solution officially proposed for some reason. Even a gradual tightening (e.g., 5% per month for 6 months, or some such thing) would have the desired effect. We'd sell off sharply, base for awhile, and then things would settle down.
As far as the Japanese as concerned, though, their comments aren't surprising. They've been pissed for at least a year now that Rubin and others have chastised them for not pumping up their economy fast enough. They take any chance they can get to dump on US handling of our economy. And they will probably be gleeful if we have a crash. But it will be shortlived--a few of of our excesses may be as deep as theirs was, but they are not nearly so widespread, and not nearly so entrenched in our economy as their excesses were.
Sam |
