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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: pezz who wrote (5238)	6/24/2001 2:52:47 PM
From: Ilaine	Read Replies (2) \| Respond to of 74559

Actually, I have no idea whether Irving Fisher said that with tongue in cheek, but regardless, he was a professional economist, not a financial analyst. His claim to fame is the Fisher equation, MV=PT. I've posted before about famous men who got out of the stock market in the spring and summer of 1929 - don't want to bore people again - but will mention (for the first and probably only time) that I have a copy of a speech given by E.H.H. Simmons, President of the New York Stock Exchange, at the Annual Dinner of the Chicago Stock Exchange, May 9, 1929, where he lays out in great detail how the Federal Reserve was deliberately pursuing tight money policies with the intention of bringing down the stock market. I think the President of the New York Stock exchange is a credible person on this issue. He stated that starting in the spring of 1928, "the Federal Reserve system began to put severe pressure on the money market by practically every means at their control. This policy has been with fair consistency maintained ever since. As a result, stock market loans are about 1 1/2 billion dollars higher today than they were one year ago. If the whole aim of Reserve policy was to reduce stock market loans, then obviously the methods which they have employed have failed. This raises the question as to whether they should continue indefinitely to use methods which have proved unsuccessful, or whether they should devise some new method - and if so, what. It is important that the real solution of this problem be arrived at as speedily as possible, since the bad effects of the Reserve policy of tightening credit have become clearly apparant. The bond market has been crippled, and banks in this country with holdings of 14 1/2 billion dollars of bonds have been seriously hindered in attempting to dispose of them. A higher cost for credit has been imposed on American industry, agriculture and commerce. Vague fear and lack of confidence has been injected into the security business. A rise has been caused in central bank rates and open market money rates abroad, with a weakness in certain foreign exchanges. Even the American bill business - that especial favorite of Federal Reserve policy - has been seriously disturbed. It may be that still more serious danger to American business looms ahead, if this policy of high money is persisted in." What intelligent, reasonable person today hearing that would not fear both a stock market crash and a recession? Simmons correctly identifies the cause, and the effect, and accurately predicts the future - yet even he was blind, for he continues: "The reason why the Reserve policy of tight money has failed to reduce stock market loans is, as I suggested a moment ago, because the funds employed in these loans are today to so large an extent capital, and not mere bank credit. [By which he meant that the money being loaned was from savings accounts, of small investors, all over the country - traditionally this money has formed the basis of business loans, not call loans.] When one clearly realizes this, once can understand just what has happened with stock market loans over the past year. The more fear propaganda, warnings and vague threats the Federal Reserve system has issued, naturally the more it has impelled owners of capital to place their funds in the safest form of loan which they could obtain. Stock market call loans are without question the safest form of investment known in this country." I don't know how many call loans were defaulted on in 1929, whether it was a little or a lot, but of course the magnitude of the Great Crash was exacerbated by brokers selling out margin accounts in order to repay call loans. Simmons, by the way, always blamed the Crash on the collapse of the Hatry empire, which was triggered when it turned out that some of Hatry's collateral were forgeries.

To: pezz who wrote (5238)	6/25/2001 9:21:24 AM
From: JHP	Read Replies (2) \| Respond to of 74559

ahh the arrogance of an assumuing Pezz! On March 14,2000 Jeremy J. Siegel authored an article in the WALL STREET JOURNAL entitled "Big Cap Tech Stocks Are A Suckers Bet" It had a list of unsustainable values large cap companies with price/earnings ratios over 100! 1)Cisco Systems market cap $452 billion on 3/7/00 2)AOL/Time Warner market cap $232 billion on 3/7/00 3)Oracle market cap $211 billion on 3/7/00 4)Nortel Networks market cap $167 billion on 3/7/00 5)Sun Microsystems market cap $119 billion on 3/7/00 6)EMC market cap $130 billion on 3/7/00 7)JDS Uniphase market cap $99 billion on 3/7/00 8)Qualcomm market cap $91 billion on 3/7/00 9)Yahoo market cap $90 billion on 3/7/00 OK SMART ASS WHAT ARE THE MARKET CAPS OF THESE COMPANIES TODAY? So pezz you owe Mr.Siegal a big SORRY and a smooch of his ass and then try reading before mouthing off and displaying your ignorance. john from your dimwitted post >>>Ahh, the arrogance of academia...Although outta their league they continue to apply science to what is an art.......Random walk ..........LOL<<<