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

To: pater tenebrarum who wrote (34626)	5/23/2000 9:20:00 AM
From: Crimson Ghost	Read Replies (5) \| Respond to of 42523

From a retired broker: GET OFF GREENSPAN'S CASE "It's" simply NOT Greenspan. That is a simplistic excuse for blaming the stock market's ills on a high profile target. None of you whiners complained when the Fed (with Greenspan as chairman) grossly overinflated monetary reserves in attempts to prevent cyclical corrections of excesses run up in Mexico, Asia, and Russia. As long as "policy" supports the long side of the market, driving it to excessive, unsustainable levels of overvaluation, well,...that seems to be O.K. Now, ole' Easy Al is outnumbered by more responsible members of the governing board. There were rotations off the Fed last year with "new guys" coming in to take their places. The changes shifted the balance of power in favor of monetary "hawks" who felt like the crazy, artificial inflation of equity assets had exceeded the danger point. According to some interesting sources, Greenspan actually wanted to raise rates by .25 point but was outvoted in favor of a more restrictive move of .50 point. This should have been done long ago, BEFORE the lunatic fringe took decent companies like CSCO, INTC, SUNW, ORCL, etc. and turned their stocks into garbage. For example, there was simply no way CSCO was "worth" anything close to 250x earnings. The math can''t ever work out. Most of the speculative leadership was guided by the investment wisdom of teeny boppers - video game freaks armed with a mouse and easily available credit. There is nothing new about this phenomenon, it happens periodically whenever a new generation of market speculators is born and enters the market armed with a complete lack of experience and plenty of wild-eyed optimism. The cycle is and always will be repetitive, and if you live long enough, you'll see your children's generation and/or their children's generation repeat the process. AND, none of your advice will be taken seriously, any more so than the current generation's willingness to heed the warnings uttered by "fossils" over the past year or so. SO, stop bashing Greenspan. It's a completely worthless exercise and it won't get your money back. Sure, the bubble that just broke was encouraged by his policy guidance at the Fed. BUT, he did NOT prick the bubble. The air has been leaking out for two years, DESPITE the Fed's efforts to keep it inflated. However, wiser heads have assumed a majority position on the board so we'll just have to get used to a "different" cast of characters and a distinctly different set of "policy" actions. If you insist on "blaming" someone or something, blame the financial press, such as CNBC, with their inexperienced, blow-dried "media stars". Blame the Wall Street hype artists who used and abused the phrase "The-Long-Term" to encourage all sorts of nonsensical investment activities. In effect, by over pricing "The-Long-Term", millions of investors sucked in near the top, will have to wait a lifetime to break even. Some of the individual stocks will NEVER come back or even approach their former highs. Blame the con artists who ran all the "boiler rooms" - those "day-trading" scams that convinced several million neophytes they, too, could win the lottery. Blame the incompetent but highly paid "analysts" who substituted "price targets" for meaningful analysis. Blame the cheerleaders with their "Market Targets", (all those "gurus" who fronted for the brokerage houses.) Blame "Wall Street Week" for its smug, self-absorbed endorsement of the "one way street" (Up forever). Blame the brokerage houses who fired their most experienced analysts for daring to warn clients of an impending bear market. Blame the FASB for allowing firms to get away with fraudulent accounting practices - especially the "tech" companies - as they kited "earnings". Blame the SEC for allowing so much blatant corruption and manipulation among companies trying to juice up their stock prices. Blame Janet Reno's Justice Department for going after MSFT. Blame Al Gore for inventing the Internet. Without it, day traders could have never been trapped. Blame the "analysts" who allowed the "expectations" game to get started and then went along with it as corporate managements started "playing" the game. Blame the Clinton administration for its Income Tax act of 1993, severely restricting cash compensation for top corporation executives. This encouraged the stock option game which, in turn, led to corporate management's increasing focus on kiting the company's stock price. In many companies, "stock price focus" became more important than whatever the company actually did for a living. Finally, blame the face in the mirror. As H.L. Mencken once said, it's very hard to cheat an honest man. Greed and especially carelessness, has always been the main "reasons" for an investor's stock market losses.