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.
Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 76.22+0.1%3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Steve who wrote (49241)2/22/2001 3:04:54 AM
From: Hector  Read Replies (2) of 77400
 
Hey Steve,

Re: "Greenspan's focus is the economy not the stock market"

Did you ever wonder why the FED cut rates 50bps on 1/3/2001 at a time when many traders were out to lunch.

Did it ever occur to you that consumer spending accounts for 2/3rds of the economy and maybe, just maybe, the disappearance of $5 trillion from stock portfolios may have had a negative impact on consumer psychology, thereby inflicting serious damage on consumer confidence and accordingly, spending?

Wake up! The stock market has become the economy and the FEDS' insistence that it doesn't target stock prices, doesn't make it so. All indications are that's exactly what it's doing. The immense pumping up of the money supply and rapid reduction in short-term interest rates at a time when their fears about inflation haven't changed, were done for one reason. They were worried that the stock market decline would continue, thereby, snowballing an economic slowdown into a serious recession or worse.

The FED knew it would get a knee jerk reaction from the markets when it reduced rates in such dramatic fashion. The problem for them at this point is they can't use this tool too often. It will be evident what's happening and each subsequent cut will have less of an impact, as in Japan 1990.

The "efficient market" model may exist in academia, but I haven't known too many academics who ever made any money in the stock market.
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