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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Cynic 2005 who wrote (17875)	10/5/1999 11:17:00 PM
From: Rational	Respond to of 18056

AG is worried about another fiasco of bank failures that crippled the economy starting before the 1987 crash. AG lowered rates to help banks who basically borrowed newly minted money at lower rates to lend everywhere and get fatter. This revived the US economy, thanks to the stability plank of the US that induced outsiders to pump capital into America soon after Clinton opened up the flood gates and decisively moved to raise taxes to reduce the budget deficit. That's history. What can be said now? Well, banks are having trouble as they were before 1987. One should keep in mind that the banking sector's performance is a harbinger of what's to come. The difference this time is that the rest of the world loves America as a storage for ill-gotten wealth with no questions asked. They are prepared to take a hit, given that they have no where else to take this wealth. If there is renewed weakness on dollar (I am sure there will be), the Fed may step in to sell gold as the Europeans are doing to save their currencies. Most US stocks have been battered, except the large ones. Thus, there may be a slow and painful fall as AG is hoping.