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Pastimes : The Naked Truth - Big Kahuna a Myth
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To: pater tenebrarum who wrote (70115)10/19/1999 6:49:00 PM
From: Lucretius  Read Replies (4) of 86076
 
HO HO HO

i assume everyone read fleck's rap:

All Fed up... Finally, I would like to discuss Al.com. The new-era types are all mad at Easy Al now because he's talking mean. People seem to forget that the mania that's in progress was brought to them by Al.com and the merry pranksters at the Fed. Michael Belkin in his report yesterday had some interesting comments about the Fed and Greenspan's desire to have it both ways, and the predicament they're both in:

"We are Fed up. The spectacle of Greenspan warning of sharp reversals of confidence and panic reactions is like a drunk tour bus driver warning of a crash as he veers off the road, through the guard rail and over the cliff. The Fed has done everything in its power to foster a false confidence in the U.S. speculative bubble on the part of gullible investors. We have consistently maintained that last year's 75-basis point Fed rate cut following the LTCM debacle was entirely inappropriate for the U.S. economy and had only one purpose - pushing financial markets back up. Twelve months later, the Fed has only taken back 50 basis points of that 75 basis point save-the-bubble monetary stimulus.

"And what is the net result? A year when speculative excesses went from the sublime to the ridiculous. The S&P 500 rallied 48 percent from early October 1998 to its July 16 peak (the intended effect). However, the U.S. 30-year bond future voted thumbs down on Greenspan and dropped 21 points after the Fed started cutting rates. And now (with a typical 12-month lag) price pressures are building in traditional measures of inflation like the PPI. Greenspan sacrificed the real economy (Main Street) to the speculative bubble by cutting interest rates solely for Wall Street.

"That Greenspan should suggest banks be more risk averse is a farce. The leveraged pyramid that supports the speculative bubble is based on Greenspan's monetary machinations. The Fed sent out a clear smoke signal last year with its LTCM bailout interest rate cuts - go out and buy stocks with abandon, shop until you drop, splurge on mergers, build that new skyscraper and take any half-baked, pie-in-the-sky Internet business plan public in an environment of Fed-inspired casino capitalism. Let's face it - this bubble has Greenspan's name all over it and DNA inside it. For him to suggest otherwise is to deny paternity, in which case the speculative bubble is entitled to child support.

"If the stock market drops now and Greenspan cuts rates aggressively like last year, he will invite an extreme dollar crisis and an inflationary spiral. The Fed's incompetence has brought us to this stalemate. A Fed monetary policy focused on cushioning any stock market decline has stretched out this economic cycle to the breaking point and has increased the ultimate downside market adjustment necessary to bring markets back into equilibrium. We are Fed up with Greenspan and you should be too."
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