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Non-Tech : The Critical Investing Workshop
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To: Uncle Frank who wrote ()3/13/2000 2:21:00 AM
From: surfbaron  Read Replies (2) of 35685
 
Treatsie/Diatribe on the machinations of the Fed:

I am sick up and fed with the constant bolshevick spouted by the duped investors/citizens who listen to Mr. GreenEggs&Ham and can't form their own opinion so they rely on the big ho houses, media and ignorance to guide their thinking.

Lets start with the basics. GreenEggs&Ham does not give twoshits about the stock market. His 90%(Hark Voltish) concern is the DEMAND FOR THE LONG BOND. Forget every thing you have heard him say about the stock market. He must manage the demand for the long bond as best he can.That demand and their rates are highly elastic. We have 5 trillion in debt to finance and he has to maintain the demand for our long bonds, so contrary to everything you have heard in the press about surpluses till the end of time, long bonds are not disappearing. He and the fed chairman of the past have had the luxury of influenceing this demand through their increases/decreases in short rates. This influence is disappearing(As Jackass has testified). It's not a pleasant scenario though for the taxpayers( I say taxpayers instead of all citizens because the takers of society don't factor in).We taxpayers have been fortunate in a few areas. BJ Bill went to short rates in '93 saving us 200B annually in interest(ballsiest/stupidest financial move by a president in history). GreenEggs&Ham was ok with it because he could lower short rates. Now that short rates have crossed long rates he is beside himself. The treasury now wants to go back to long rates(as any investor that witnesses a crossing of rates). If he keeps raising short rates like the frickin world thinks he will, then who in the hell is gonna buy our long bonds, when they can get better rates with shorter maturity, NO F**kin Duh.

Thus all the Dr Zeuss like crap coming out of GreenEggs&Ham, trying to scare the hell out of all the bluebloods and newveou reesch in to bonds. It won't work because long bonds have no demand and as the great Voltish has explained quite correctly a security is only of value if another is willing to buy. IT's QUITE CLEAR, PRACTICALLY SPEAKING THE DEMAND FOR OUR LONG BONDS SUCKS.

So the investment community has a reason to be scared shitless but for completely different reasons than you read about. Somebody better buy our bonds or the whole house of cards will collapse. That 5 Trillion in debt won't go poof.

As long as Europe is mired in socialistic malaise and Japan's rates stay near zero we are ok.
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