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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Freedom Fighter who wrote (68413)	9/30/1999 11:26:00 AM
From: Henry Volquardsen	Read Replies (1) \| Respond to of 132070

Wayne, I would need some inflation barometer to help me determine whether yields were compensating me or not. Personally I like the GNP deflator, tough to mess with. Other than that I use my personal perception of what it costs me to buy what I want and anecdotal commentary from friends. I don't care about tenths of a percentage, the overall trend is important. And market prices give me sufficient feedback. This is an art not a science. Its all subjective. There's some sort of trade off going on for gold holders. I believe they have a much longer investment perspective. In the long term we are dead. No offense but I have little use for long term perspectives. As a manger of professional traders I have found that long term perspective is what you get when your position is in the red and you didn't cut your losses early enough and you are trying to keep the boss from smacking you in the mouth. I'll give you a little story about long term perspective. Early in my career I worked for a very large US bank. After the oil shock there was a lot of demand by the emerging market countries to help finance their balance of payment problems. The chairman of my bank was wondering if this would be a good business for the bank to get into. So they gathered some of the top economic minds in the country and had a big meeting with the board. These great minds told the board that governments don't default, they always repay. So dear old MegaBank went hell for leather into lending to Latin America and other emerging markets. Years later when they were choking on this wad of debt the Finance Minister of Brazil made a pithy little observation at a meeting with the major banks When you owe the banks a million dollars and can't pay you have a problem, when you owe them 80 billion dollars and can't pay they have a problem. The chairman of MegaBank didn't think this was funny. Eventually he reconvened the meeting with the great minds so they could reassure the board that governments always repay. The elitist of the elite economist said Absolutely yes. In the long term they all pay. The chairman being the clever sort he was noticed the recent addition of in the long term. Being not at all shy he asked What the f@%k do you mean by long term?!?. The response was rarely more than a hundred years. Gulp! All identities have been concealed to protect the stupid. fwiw my profile contains a quote that relates to my view on long term perspectives the markets can stay irrational longer than you can stay solvent :) Henry