To: J.T. who wrote (844 ) 10/15/1999 1:24:00 AM From: J.T. Read Replies (1) | Respond to
Didn't Mr. Greenspan mention something about confidence in his speech tonight? The confidence is surely misplaced now with these sectors wandering in the dark ..That is all this market is about now is the infant stages in a crisis in confidence. The musical chairs game kind of depicts this vacuum of buyers now>... .sharp reversals in confidence occur abruptly, most often with little advance notice. These reversals can be self-reinforcing processes that can compress sizable adjustments into a very short period. Panic reactions in the market are characterized by dramatic shifts in behavior that are intended to minimize short-term losses. Claims on far-distant future values are discounted to insignificance. but, to date, economists have been unable to anticipate sharp reversals in confidence. Collapsing confidence is generally described as a bursting bubble, an event incontrovertibly evident only in retrospect. To anticipate a bubble about to burst requires the forecast of a plunge in the prices of assets previously set by the judgments of millions of investors, many of whom are highly knowledgeable about the prospects for the specific investments that make up our broad price indexes of stocks and other assets. ruptured confidence are integral to the way our economy and our financial markets work now and in the future, the implications for risk measurement and risk management are significant>...
