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Strategies & Market Trends : Intraday Updates, Analysis & Strategies for Daytraders
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To: ColtonGang who wrote (535)3/20/2001 7:57:51 PM
From: kendall harmon  Read Replies (4) of 589
 
Coltongang, this is a bold post and I agree with most of it. Alan Greenspan blew it badly in 1990-1991 and he has now blown it badly in 2000-2001 as well. What is amazing is that to SOME extent an element of this was avoidable by AG, given the economic conditions (i.e. relatively low inflation, etc.). They tightened too much last year and they have been too slow to loosen since last fall.

The question which is being missed is this: who is right, the Fed or the stock market? If you listened to Fed officials even into this past weekend, they are arguing that things are not really that bad in the economy. If you watch what the market IS SAYING ABOUT THE ECONOMY it is saying there will NOT be a soft landing. Either the market is right or the Fed is right. It cannot be both.

All during the last several days we have heard that the fed should not target the stock market. Agreed. But the fed is responsible for managing price stability IN THE ECONOMY. The market is saying growth is slowing a lot more than the fed thinks. They were way late in gathering that we were in a recession in 1990, and they may well be way late in understanding the degree of the current slowdown. Given their gifts and intelligence, and the greater degree to which more economic data is available sooner, this is a SERIOUS misstep. And the buck stops squarely on Alan Greenspan's desk.

VERY FEW journalists and pundits have had the courage and conviction to say as much. Let us help for better in the future.
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