Zev,
I too lurked for quite awhile before joining SI ; and am also appreciative of your thoughts. I am a bit puzzled, though, by your recent posts concerning Greenspan. Part of this may be due to the fact I am not familiar with some of your early posts and thus may not fully realize the context from which you speak . In any event, I hope
you will clarify it for me.
In your recent post to Bosco, you noted one of the reasons you were turning bullish was due to the management of the economic situation by AG . This post was today when the Dow was in the high 8300 range.
In a subsequent and very recent post to MMV one of your tests of whether AG properly handled the situation was whether he kept the Dow above 5000 over the next few years. It also was somewhat unclear to me whether you believe the July run-up was a "bubble"
and , even if it was, whether Greenspan shared some of the responsibility for its creation.
In a nutshell, I am trying to reconcile your current bullish stance with
the test you prescribe for measuring Greenspan's success. At this point, I am not arguing they are necessarily in conflict but am simply trying to fully understand you position.
Given your current bullishness, assume a rather modest run to 8500
on the Dow. A return to just over 5000 would be an approximate 40%
retrenchment. Of course, if measured from earlier highs, the percentage retracement would be considerably higher.
Is your bullishness based upon fundamental factors? Or technical
factors? Or some combination? If not based upon a fundamental view, are we talking about gains which have a "bubble" characteristic? In any event, I assume that this bullishness must be short term given your test of Greenspan effectiveness. Is that correct?
Assuming Greenspan passes your test but the Dow does retract close to 5000 number, is none of this 40% properly characterized as a "bubble"? Even if some portion is, does blame for it, in whole or part,
rest somewhere other than Greenspan? If so, why?
I respect your views; your clarification of the foregoing would be most appreciated.
Regards,
Tundra
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