Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Glenn D. Rudolph who wrote (98312)	4/2/2000 12:52:00 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

Glenn, since your a retailer I thought this might interest you. You see even though Federated has had enormous success with bricks and mortar kind of retailing... its Federated substantial investment in on-line selling that's hurting its stock. latimes.com

To: Glenn D. Rudolph who wrote (98312)	4/2/2000 8:32:00 PM
From: Tom Kearney	Read Replies (2) \| Respond to of 164684

Glenn - As you might imagine, the cause of the Great Depression is controversial. But, to read the conventional wisdom repeated endlessly on the financial press today, I think one would have to believe that the stock market crash directly caused the depression, case closed. My reading is somewhat different. I have attached some links that explore various aspects of this, but my reading goes like this: The market in early '29 probably was a bubble. But, in reaction to the crash, the Fed tightened the money supply, and kept it tight for years to try to correct the problem. Also, congress insisted on balancing the budget even thru severe deflation. There was a great moral tone to all this, too. The government was going to punish the bad speculators. The money supply in 1932 was 65% of what existed in 1929, an enormous drop, completely government engineered. The whole situation is complicated by the fact that the world was still on the gold standard, and protectionism was rife. Compare this to Oct '87. In '87 we have a huge correction, but the Fed immediately acts to add liquidity to the system. It seems to me likely that the market would have recovered from the '29 crash, too, except for that the government went and killed the whole economy. From: ex.ac.uk On Black Thursday 24 October 1929 the collapse came. Having fed the fever the monetary authorities now proceeded to starve the sick economy by persisting in a contraction of credit which is probably the most severe in American history. Net national product fell by 53 per cent. The Fed which had been set up to provide an elastic currency strangled its patient. Roosevelt's first action on becoming president was to declare a bank holiday. From: econ161.berkeley.edu (Note the money supply graph below the paragraph that begins "Throughout the decline....") Milton Friedman and Anna Schwartz argued that the Depression was the consequence of an incredible sequence of blunders in monetary policy. But those controlling policy during the early 1930s thought they were following the same gold-standard rules of conduct as their predecessors. Were they wrong? If they were wrong, why did they think they were following in the footsteps of their predecessors? If they were not wrong, why was the Great Depression the only Great Depression? The Federal Reserve did not use open market operations to keep the money supply from falling. Instead the only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931. The Federal Reserve thought it knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector's task as the "liquidation" of the American economy. And it feared that expansionary monetary policy would impede the necessary private-sector process of readjustment. The 'leave-it-alone liquidationists' headed by Secretary of the Treasury Mellon felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: 'Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate'.He held that even panic was not altogether a bad thing. He said: 'It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people' Here's the typical coventional widsom: odur.let.rug.nl Regards, Tom