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Non-Tech : Greenspan, Rubin & Co - the Most Irresponsible Team Ever?? -- Ignore unavailable to you. Want to Upgrade?

To: Thomas M. who wrote (283)	1/4/2001 10:02:10 AM
From: Cynic 2005	Respond to of 309

Regarding the latest move by Greenspam, I couldn't have said any better than Fleck: Easy does it. . . Speaking of Easy Al, I would like to digress and just say that in my opinion Greenspan has once again shown that he is only concerned about the stock market and that bubble management is his game. Had he any real concern about the real economy or any understanding of the same, he would have eased a small amount at the Dec. 15 meeting when it was apparent to anyone with an IQ over 40 that the economy was in trouble. He chose not to do so, which surprised me, since I had expected him to cut rates. But as the stock market appeared to be under more pressure, he gave us a surprise cut today to try to prop up the market. It appears that one of his delusions is that he can manage a $15-trillion stock market and a $10-trillion economy all by himself. He was able to do that during the bubble but the bubble has burst. That's not to imply that there won't be a certain amount of euphoria for awhile and a willingness to overlook bad news as Easy Al passes out cocaine to all the drunks. But the important thing to recognize is that we are in the process of reattaching these pieces of paper to the underlying businesses, the prices of which are still absurdly high and the fundamentals of which are still deteriorating in many cases. Easy Al seems to want us to believe that he will always be there to issue the put and that he has conquered the business cycle. Anyone who has studied his record knows that his record on the economy in terms of anticipating events, even after he became Fed chairman, has been very poor (see "Alan Greenspan: friend or foe?"). Greenspan seems to think, as do his followers, that the only acceptable economic outcomes are either boom, or less boom, where in the 15 minutes of less boom we correct the excesses. In my opinion he is the most irresponsible Fed official ever to inhabit the Fed and he is a menace to society. (That makes the two of us, Fleck!) What, does he have the panic button on speed dial?. . . I find it quite stunning that Easy Al chose to "save" the stock market when the Dow Jones Industrial Average was trading at 10,600 and change, after the average diversified mutual fund, as reported in this morning's Wall Street Journal, lost just 1.67 percent. Not exactly what you would call signs of major distress. Having said that, there obviously are a great deal of folks hurting, but that was because they behaved in a somewhat reckless manner, speculating in wild securities or using debt, or some combination of the two. What Greenspan fails to understand is that all he's doing is continuing to make the ultimate fallout from this worse and worse. So in my opinion if you are holding stocks, the recommended thing to do is to use this rally to lighten up. If you are waiting to buy them, you are just going to have to wait longer. Many people will be tempted to try to trade this bounce, and maybe it will go on longer than I think and they'll be successful. But we have a lot of unfinished business to do on the way down, and in my opinion we will get that done before this year is out. Away from stocks, bonds got smashed, with the yield on 5-year notes up 25 basis points. The precious metals were continuing their slide, with silver down 1 percent and gold down about ½ percent. Oil was up 79 cents to $28, and the euro was down 2 ½ percent. There were a couple of interesting developments in the news. A friend sent me an e-mail regarding a story that the Home Appliance Association of Finland said in effect that retail phone prices were at record lows there due to retailer discounting before Christmas because of high inventory levels. This corroborates my view that a world of hurt is still poised to come crashing down on wireless stocks and their component suppliers, especially Nokia (NOK). siliconinvestor.com

To: Thomas M. who wrote (283)	1/4/2001 10:10:04 AM
From: Cynic 2005	Respond to of 309

I remember reading that in good ole days! -g-

To: Thomas M. who wrote (283)	1/4/2001 11:29:59 AM
From: Cynic 2005	Read Replies (1) \| Respond to of 309

(The following is entirely my speculation about the situation - do not place any bets based on this speculation. -Cynic) Why Did Greenspan and the Feds Panic? I believe that the Feds' and California Government's solution to the energy crisis in CA is to let So. Cal Edison and PG&E file for bankruptcy! That way they don't have to pay the bills to the power generating companies. I am not sure if the power generating companies can take the blow without they themselves going under. But I am guessing they can afford to write off these receivables. After this crisis is over, the congress will renege on the power deregulation and put clamps back on the utility companies. What is the Feds' role in this? First of all, if S. Cal Edison and PG&E are going under, that will be a tremendous blow to the confidence in the credit markets. Therefore, they have tried preempt that blow with a pre-bankruptcy- filing-rate-cut! If this speculation is true, whether the Feds' effort will work or not remains to be seen.