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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: paulmcg0 who wrote (43097)	8/21/1999 6:22:00 PM
From: Ken98	Respond to of 94695

Paul, that article is a good find! Obviously, this quote was written pre-LTCM: " Bailing out individual firms is not the job of the Fed, nor is it in the public interest since it would induce excessive risk-taking in the private sector." It is a shame that the Fed did not practice what they preached. I guess that the quote should have read "Bailing out individual firms NOT IN BED WITH THE FED AND OTHER WALL STREET POWER BROKERS is not the job of the Fed...." Seriously though, by bailing out LTCM they created the very situation that the author of this article pointed out - "excessive risk taking in the private sector..." The IMF has done the same thing in the international arena. Risk is now systemic - witness the loans being made to Russia to keep paying interest on debts, the principal of which will NEVER be repaid - witness investors salivating to buy shares of companies whose very existence requires a continual flow of capital (the CLEC phone companies come prominently to mind) - and on, and on, and on.