MDA - Market Direction Analysis Message Board

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Strategies & Market Trends : MDA - Market Direction Analysis

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To: Ted Downs who wrote (72555)	3/18/2001 5:40:29 PM
From: Rob S.	Read Replies (1) of 99985

You guys are all overly simplifying the problem. The telcos had little problem in getting hundreds of billions to use to overbuild infrastructure. There was little problem getting hundreds of millions to roll out incredibly speculative (hair brained) Internet business schemes with their primary purpose being warped by ease of money squandering into get rich quick ponzi schemes; do some venture funding to bring it public and then throw money around to fund rapid growth with negative profits. I wrote a business plan to do an Internet BTC; my spread sheet made me realize that the high cost of emplying computer and web development talent vs. normal retail channels made it very difficult to become profitable. I was encouraged to go ahead and get ventrure capital anyway, ramp sales, go public and cash out. When the motive for so many businesses becomes pump and dump the problem can't be laid to lack of liquidity (high interest rates). your point about increasing margin rates is valid and I agree - the FED should have increased the margin requirements to 80%. There has been PLENTY of money around to fuel bubblenomics. Now spoiled investors are sore because the ball game has changed back to earnings before price or at least within rational expectation. Get over it. Regardless of what we think the reality is that corporate profits will decide the direction of the market and FED rates won't change that overnight. If you know what effect the FED (Greenspan) has on the economy and take action on it effectively you can make money as an investor. If you think Mr. G. is an idiot and he is tanking the stock market short it.

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