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Non-Tech : NOTES -- Ignore unavailable to you. Want to Upgrade?

To: Didi who wrote (598)	2/28/2001 9:17:24 PM
From: Lee Lichterman III	Read Replies (2) \| Respond to of 2505

HORRID statement OK, I will grant that one. it was a bit harsh <g> Was this liquidity injection necessary? If so, why did it go awry? Yes, it was necessary since Asia, South America Russia etc were all on the brink of causing a massive global collapse in 97 and 98. I hate to say it but those with brains figured out long ago that we are a country of morons and this time it is not being too harsh. I could write a 500 page thesis pointing out the whys and giving examples as to why so I won't expand on it here ( hints-WWF, tough man, SUVs, Avg debt levels, dumbed down news and TV, obsession with sports etc). Our whole existance and the financial well being of those with the money depend on this aspect of our society so it is OK -g-. Anyway, I digress. The Fed knew if they eased monetary policy, Joe Six pack would max out his credit cards and spend like there was no tomorrow. What he expected and only partially got in return was for the countries in trouble to be able to export their way out of distress by using us as the ever willing consumers of those goods. What he didn't count on was people bidding up the markets with that cash to those stock market levels. Had people not wasted their cash on the dot bombs etc and bought durable goods, etc those countries might have been a bit stronger by now so that we could reverse the favor. If the Fed did screw up, it was in flooding the markets with liquidity again in fear of a Y2K bank rush which never occured. In their defense, who knew for sure if there would be problems or not. There was no prior event like this so they played it safe. The problem with a bubble like we had is it takes more and more liquidity just to maintain it there much less enable it to grow larger. They could have not raised rates and the result would have been the same eventually. It was just a matter of time. WHat they are trying to do is let the air out now before it really crashes which we are no where near crashing right now. We are simply dropping to where we should have been in the first place. Should those who invest in hope of secure futures for themselves and their loved ones be called morons? There weren't many investors left, everyone thought they were trading geniuses and many were quitting their jobs to be full time day traders. Baboons were slinging guano at wall street journals and making more than the Funds the last few years. Funds were headed by experienced figure heads but the actual trades were being decided on and executed by 20 somethings still with acne that had never seen a market that didn't rise 20% a year while their bosses were out being smoozed by the companies wanting a "strong buy" rating. Even many here n SI that saw the historical figures, charts, even watched Japan melt down didn't get it. This was so blatently obvious it was impossible to miss. Denial isn't just a river in Egypt. Very few real investors are getting hurt here. They aren't the ones that were in high growth tech at the top, they didn't own the ones that have dropped 90%, they aren't even in the ones that have dropped 50%. They are teh ones that aare going to buy all this stuff when it falls to under a PEG of one, when price book and price sales fall under one. They are the ones that are going to buy it when most here never want to see a stock again in their lives. Those are the investors and those are not the morons. Buying a Dot bomb, a B2B, Biotech, Semi, B2C, networker, etc company with a PE in the triple digits on double digit growth was not investing. These people had a better chance of winning the lottery than those being smart investments so yes they were morons. I think people are quickly forgetting the things that were happening just prior to last March that they shouldn't. Books will be written someday about this market. Houses were being bought with the only collateral in stock options that are now worthless and should have never been worth anything other than OTC BB single digit pink sheets. Landlords were demanding payment in stock options of the same type companies. These people were not investors they were casino gamblers and they either have lost or are losing. Right now we are down over 50% in the NASDAQ yet all you read on SI is how we are at the bottom. There is no fear, there is no capitulation. All I see is anger at the FOMC, at CEOs, at bears that are making money on the perma bulls dumb behavior. Every day I go to work I make a subtle comment on the market and every day I get the same response, "It will bounce back". When I stop hearing that, then I will buy. The pundit's you point to are mainly talking heads for the funds. Do you really think they believed that AOL was a must own at the top or that the market was a buy the last year? They were getting the dumb money to buy thier shares or else buy thier short sales. They make money for their firms. They don't give advice out to anyone for free!!! The COT has had increasingly large commercial ( smart money) short positions for almost a year. Guess what, most of those analysts work for those same people. Guess who made it easy for their own firms to get short? Yep Guess who will probably tell you to finally capitulate and sell at the bottom so they can cover? Yep! Remember the well being of this country depends on a lot of dumb people. Who else is going to empty the garbage cans, put lug nuts on cars in assembly lines etc. SOmeone has to be back there manning the office while the smart ones are out playing golf and taking long lunches over fine wine. Good Luck, Lee