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Pastimes : All Clowns Must Be Destroyed -- Ignore unavailable to you. Want to Upgrade?

To: pater tenebrarum who wrote (31277)	5/4/2000 6:20:00 PM
From: hunchback	Read Replies (1) \| Respond to of 42523

Bob Prechter is offering a free week to his site (you have to register first I think) elliottwave.com BTW, he still says gold below $200...LOL...I hope he is wrong.

To: pater tenebrarum who wrote (31277)	5/4/2000 7:26:00 PM
From: Ken98	Respond to of 42523

<<do i believe him that? not for a second actually, but it's the third time he's said this since October last year>> I agree Heinz, and that is the paradox inherent in the moral hazard that Asymmetric Al has created. Note he speaks prospectively about the "overreliance on public policy" that COULD create moral hazard - all the while his very actions have created the ultimate moral hazard. If you are on the board of CMB (or for that matter a private equities investor) and saw the extraordinary lengths to which Al went to bail out one private hedge fund why NOT assume he will do exactly the same thing the next time someone gets the sniffles? Everyone knows there is absolutely NO way he would ever let an intermediary fail. He will go back to the same playbook he used in October 1987, early 90's (to reflate the banks) and fall of 1998 (to bail out LTCM)- slash interest rates as fast as possible and flood the market with liquidity. He has clearly stated that he views the Fed mission as ensuring endless prosperity and, based on his actions, the means to achieve that is by permitting ever increasing amounts of risk to be taken on and by jamming the system with dollars. Accordingly, why should any reasonable person take his statements as anything other than puffery? And thus you have the very circular nature of the moral hazard he has created - by trying to mitigate EVERY risk he has allowed ever increasing risk to ooze into every crevice of the economy. From day traders using credit card loans to commercial banks and smokestack companies becoming "venture capitalists". Look at the very stocks that took off after the Fall 98 bailout - every POS without earnings and nothing but a story. Risk was rewarded. Failure to take ever increasing risk was punished. It was some sort of perverse positive feedback loop. That is what killed the value investors. So the REAL question is - will he be able to put Humpty-Dumpty back together again NEXT time? Regards, Ken.