To All, The Hot IPO market. These new hot IPOs are a direct result of the Fed printing too much money. What does the economy do with excess cash? You cannot invest in your businesses because you already have too much productive capacity. You cannot make productivity enhancing investments because you have already done what is practical and productivity means more supply, which you need like a hole in the head. The consumer can and will buy more junk, of course, but there is a limit to how much debt they are willing to take on, or, are allowed to take on, even with easy money. So, what do you do, what do you do? <G>
You create companies and sell them for 10s of millions of dollars to folks who don't know any better. And, since there are no put options on new issues and shares are impossible to borrow for shorting, you can scam the price anywhere you want for several weeks without anyone clipping you for manipulation.
This is only one way the Fed's recklessness leads to more speculation and, eventually, a dozen more Long Term Capitals. It is not even the most dangerous or most important. But it is the most public and the most easily predicted result of a bubble economy. The brokers and banks won't tell us what new idiocy they are thinking up so they can lose more money. <G>
Good Luck,
MB |
