SI
SI
discoversearch

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.
Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?


To: fedhead who wrote (17760)9/12/2000 8:10:59 PM
From: IceShark  Read Replies (1) | Respond to of 436258
 
Cash on the sidelines can scurry into deep holes for a long time, and stay there. You ever heard of CDs - I know they are nearly extinct now. -g- Or all the debt outstanding could soak it up as people batten down.

I'm not so sure if an interest rate cut wouldn't cause more problems than it would solve, ClownBuck value among them. The surprise cuts were more directed at catching the market offguard to help bail out LTCM's positions and give the backers some extra free money to do so.



To: fedhead who wrote (17760)9/12/2000 8:44:14 PM
From: Archie Meeties  Respond to of 436258
 
Dollar would fall and inflation would gain speed.



To: fedhead who wrote (17760)9/12/2000 8:49:39 PM
From: Lucretius  Respond to of 436258
 
doesn't work like that... if he did that, oil would run to 60 and gold to 500.... this time he's got falling stock prices and rising commodities to deal w/. he cna not throw more gas on the fire... he's f*cked... all clown get DESTROYED. including him....



To: fedhead who wrote (17760)9/12/2000 9:27:46 PM
From: pater tenebrarum  Read Replies (2) | Respond to of 436258
 
cash on the sidelines is often characterized as something that's just lying in wait, easily tempted back into the market. and the experience of recent years seems to definitely support that characterization. but, that's true only as long as the conditions conducive to a bull market continue to pertain, or put in other words, as long as the long term up trend seems not unduly imperiled. Japan is a great illustration of a market that has seen the largest pile of money sitting on the sidelines and staying firmly put there, no matter what manner of interventions the authorities have been thinking up.
in terms of risk/reward we have just experienced a year during which the less risky investments (bonds,t-bills,utilities) have yielded far bigger returns than the risky ones.
then there is the question how much money is there really on the sidelines potentially destined for the stock market. a recent (about three weeks ago) poll by Ed Hyman showed institutional investors to be at their most fully invested posture EVER....
don't forget, in the '98 crisis, mutual funds were building up cash reserves real fast...when Greenjeans gave the green light, there actually WAS money lying in wait. that's not the case now, and in a recessionary credit bubble melt-down funds could be hit with redemptions instead of enjoying inflows.
in Japan, the mutual fund industry lost 96% of its assets within 6 years of the bursting of the bubble....



To: fedhead who wrote (17760)9/12/2000 10:40:43 PM
From: LLCF  Respond to of 436258
 
<What about all the cash sitting on the sidelines or if Greenspan were to announce a mid meeting rate cut like he did in 1998.>

I keep hearing about cash on the sidelines when margin borrowing is still extrememly high and savings rates are negative.... what gives??? How much cash is really "on the sidelines"? Anyone know? As to the rate cut I think you point is valid... if we get $40 a barrel and 8k on the DOW, Greenspan will undoubtedly do 'something'.

DAK