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Strategies & Market Trends : Ask Vendit Off-Topic Questions

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To: Walkingshadow who wrote (2211)	11/16/2004 6:33:52 AM
From: Vendit™	Read Replies (2) of 8752

A nice post and reminder of reality. A falling dollar will mean rising interest rates, which is exactly what is happening. A flash back to the 1990s and the bubble and I’ll bet you will remember this forgotten chain of events that were the TRUE cause of the bubble bursting. True, investors like you and I and tens of thousands of others were pumping money into every new .com and tech related IPOs that hit the market, thus driving the NASDAQ above 5,200 and the DOW near 12,000. Alan Greenspan made many speeches about market over-valuation and “the new economy” in an effort to talk some sense into “we the investors”, but to no avail. We kept pumping money into the market and the Bears kept screaming. REALITY: Alan made his famous speech about “irrational exuberance” and then he changed the “Option Liquidity Rules”. Most professional traders were fully leveraged in their trading accounts at 80%. Allan changed the leverage rule to 50% and only gave traders a short time to react. Most traders either did not notice the rule change or did not understand the change so they stayed fully leveraged at 80%. The day that the rule changed to 50%, thousands of traders received margin calls on their trading account. They WERE FORCED TO SELL THEIR STOCK OR LOSE THEIR HOMES. Talking about getting caught off guard, Uncle Alan finally took the wind out of the sails of the market Bulls. Market panic set in as sellers well out numbers buyers and the Bears claimed that they were right, which was not exactly the case when you read the above statement. It actually took a change in fed policy to stop the Bull Run of the 1990’s. The resulting fall of the markets by 80% even surprised Alan. 139.142.147.218 Reid

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