SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Politics : Ask Michael Burke
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Cogito who wrote (87094)12/19/2000 10:41:18 AM
From: Mike M2  Read Replies (2) of 132070
 
Allen, I would like to point out some significant factors with a potential political connection fueling this bubble. This is not an attempt to be all inclusive. The government economic statistics have never been more misleading. The implementation of hedonic pricing in 1996 has vastly overstated GDP growth and productivity growth. Earlie has noted there have been 32 changes to the CPI computation all of which serve to understate the true measure of product price inflation. One example is geometric weighting - which assumes consumers substitute lower priced goods for higher priced goods- sounds reasonable except for housing and fuel but i suppose one can beat rising prices by moving in with their in-laws and using their cars. Another item is adjusting for quality and safety improvements - no doubt modern cars are better and safer but they also cost more but the government tells us that car prices increases due to quality improvements are not inflation. Rising home prices are not properly reflected in the inflation stats as well. There is so much more but you get the idea. Next the moral hazard created by bailing out speculators and investment bankers. When Mexico collapsed congress said no to bailouts but Bob Rubin used the Exchange Stabilization Fund ( ESF) to bail out Mexico which was a major benefit Goldman Sachs et. al. one of largest holders of Mexican bonds. The ESF is not accountable to anyone but the treasury secretary and the President. there is a lawsuit pending which alleges that ESF and others have conspired to fix the price of gold - part of Rubin's strong dollar policy ? The gold carry trade has also served to boost the US dollar and treasury bonds. LTCM bailout a rate cut just before options expiration at the expense of shorts. Next topic in my opinion the quality of earnings is the poorest in history due to aggressive and misleading accounting practices which the government has been reluctant to curtail Why? perhaps they enjoy the capital gains tax receipts from the ponzi scheme which have gone a long way to reduce the budget deficit. The most outrageous is the accounting for employee stock options. some others are the recurring non recurring write offs, capitalization of expenses, pooling in interest vs. purchase method of accounting, revenue swaps at i-nut companies. Financial engineering like debt funded share repurchases and the" beating the estimates game" . The SEC has been asleep while all this and much more has transpired. Next item the increased role of asset and mortgaged back securities which has allowed unprecedented credit creation outside the banking system and thus the control of the Fed. The non bank sector has unbelievable leverage and it an accident waiting to happen -watch out money market funds! I will be happen to provide you with references for further reading on the aforementioned issues . there is so much more to cover but this is a start. Mike
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News