You participated in CTR2? I always thought you were more sensible than that. <G>
WRT Alan and the stock market: Bob was talking about May 2000's half-point rate increase as a mistake, and I have been thinking about how hard it is to calibrate Fed moves, considering how long it takes the economy to respond. They never know whether they are doing too much or too little until it is too late. I noticed this decades ago. But in the case of the May 2000 tightening, a big clue that was already evident at that time was the obvious puncturing of the bubble in the more speculative issues, and I find myself wondering if the Fed should not give more weight to the broad trend in the stock market. I wonder if an effective method of regulating economic growth could be constructed if, instead of focusing on the traditional economic indicators, which respond very slowly, they could focus on stock prices, which respond very quickly. The idea would be that when the market is above the ideal long term appreciation rate that Greenspan has spoken of, rates would go up, and when it was below that goal, they would go down. Perhaps they would need to throw in a mix of other factors, like inflation leading indicators, etc., to make it more stable. Opinions, anyone? Do you think this would work?
BTW, does anyone agree with me that SI ought to include the name "Greenspan" in the spell-check dictionary of their investment discussion board? <G> |
