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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (12276)4/20/2004 10:23:57 PM
From: gregor_us  Read Replies (1) of 110194
 
I Remember When the Minutes Emerged from The Fed Meetings

of 1998/1999, during their rate hike cycle. There had been much discussion through this period nationally about raising margin requirements and A.G. was even questioned about this publically--but he sort of dismissed it as any solution to Irrational Exuberance. Said it wasn't effective. Said it was unimportant.

But that's not what he said privately, as revealed by the minutes. I mean A.G. knew the whole friggin' history of Margin Requirements for the prior 90 years, and had a long detailed discussion about them in the meetings with other Fed people and acknowledged that raising them "would certainly do the trick..."

I remember when this disparity emerged. Some took notice but of course the time lag between meetings and printed minutes is just over the heads of people, for some reason. And I thought..."man, this guy is a little odd."

I should have thought more of it.

When Bush was elected, my father who had spent his career watching interest rates--and had watched A.G.'s career--then spent most of the first 6 months of Bush's Term with his mouth hanging open in disbelief at what was coming our of A.G.'s mouth. "Has he gone completely mad---is this really Alan Greenspan?" This is pretty much what I heard from my father every week.

After 36 months of Reflationary Policy--I'm reflecting now on the possibility that A.G., rather than being "flexible" simply cannot make up his mind. He has been so damn consistent since January of 2001--I at least thought he understood his own plan, regardless of what anyone else thought of it.

But now I'm not so sure. A.G. may be like a bad/novice trader who stays in a losing position forever--then finally acts at the bottom. The position started out with so much conviction, so much theory--with such clarity. At the bottom though is a touch of panic, and remorse.

Did Alan Greenspan sell out of his own position today?
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