To: Enigma who wrote (52405 ) 5/8/2000 10:57:00 AM From: long-gone Respond to of 116815
Is AG speaking to those with a short gold position? Edited by Ryan Troup with MoneyNews.com Staff For the story behind the story... Friday May 5, 2000 4:52 PM EST Greenspan: Fed Won't Rescue Markets In a speach given to a Chicago banking conference, The Wall Street Journal reported that Fed Chairman Alan Greenspan warned the bankers of taking on too much risk. He said, "We must be careful not to foster an expectation that policy makers will ultimately solve all serious potential problems and disruptions." However, Mr. Greenspan has achieved the reputation of stepping in to help the markets in past times of crisis. Witness the Fed engineered bailout of Long Term Capital Management during the Asian crisis of 1998. He also quickly lowered interest rates and injected liquidity into the banking system after the crash of 1987. According to The Wall Street Journal, the Fed has taken pains recently to say that they are not in the business of propping up the market. However, participants in the market give little weight to this talk while pointing to the actions noted above. Mr. Greenspan said, "Such a conviction could lull financial institutions into believing that all severe episodes will be handled by their central bank." Today's economic releases showing strong job growth and wage inflation leave little doubt that the Fed will raise interest rates at its meeting on May 16. Many economists are now expecting a 50 basis point increase rather than another 25 basis point increase. According to The Wall Street Journal, Mr. Greenspan finished by saying, "The possibility that market participants are developing a degree of complacency or a feeling that technology has inoculated them against market turbulence is, admittedly, somewhat disquieting. Such complacency is not justified." newsmax.com