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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 694.04+0.7%Jan 9 4:00 PM EST
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To: eichler who wrote (64823)12/20/2000 8:51:34 PM
From: jmootx  Read Replies (3) of 99985
 
Hey eichler! wow somebody out there saving themselves. Good for you and your welcome. Ironically now that you bring up that spring post here are two other ironies: The Fed killed the 1929 market for the same wealth effect reasons, but went way further than Greenspan. The scary thing was they waited way too long to begin cutting rates, since the economy did not tailspin into actual recession for close to a year after the last rate hike.(the Fed raised rates a whole basis point in August 1929). The true slow demolition of the stock market did not occur until the fall of 1930 then went down to losses of 90% by 1932. We are at 60% now !! The greatest US decline since.
Just like then they saw the stock market as a bubble, but forgot that real people were panicked by the selling event....something Greenspan is clueless on. The key this time, like I wrote in the Spring, is stock compensation and a panic to liquidate options by insiders.....it serves to undermine stocks like a bank seizing up on margin. What executive wants his fortune lost to worthless options?? since they did not cost him/her next to nothing....selling them at any price is better than going underwater.

That is one fundamental flaw to this economy----price inflation, no---hyper equity 'asset' inflation, yes. Greenspan waited way too long to deal with this, Rubin bailed at the top (like his Goldman Sach's mind did not know) and both will go down as complete num nuts. There are too many still thinking this is the dip. Take care friend.
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