Silicon Investor (SI) -- The First Internet Community

STOCKTALK

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.

Strategies & Market Trends : Mu Gamma Lambda -- Ignore unavailable to you. Want to Upgrade?

To: Augustus Gloop who wrote (1923)	7/11/2001 2:41:36 AM
From: Jorj X Mckie	Respond to of 10077

Rant on Brother Gloop

To: Augustus Gloop who wrote (1923)	7/11/2001 6:10:19 AM
From: Rich1	Respond to of 10077

Great post guy... When I was working for the New York hotshots they called all this they were jsut a little early..They said interest rates will be 1 percent and the DOW 7000.. NAZ 1200 maybe they were right....BWTFDIK...

To: Augustus Gloop who wrote (1923)	7/11/2001 7:33:20 AM
From: Poet	Respond to of 10077

Great rant, Gloop. You speak for a lot of us. Argh. I see you all are really bearish today. Think this is going to be a whoosh down and reversal up later this week? I see Don Sew has Class 1 buys and even Hahn's site is looking for a (weak) bounce. I've made some nice change trading OEX poots over the last week, but have been considering going long for a position trade.

To: Augustus Gloop who wrote (1923)	7/11/2001 7:49:53 AM
From: Oral Roberts	Read Replies (2) \| Respond to of 10077

I haven't been around much with all the fishing that needs to get done, but I had to congratulate you on your fine post. Cuts right to the heart of the matter. And your point about SSI is right on and a damn shame. Pre crash it was a hard sell and I'm sure it's impossible now. Best example out there for how bad the system is would be DC exempting themselves from it. Perhaps if we could force them to take part in our system some real change would come about.

To: Augustus Gloop who wrote (1923)	7/11/2001 8:35:07 AM
From: Lane3	Read Replies (1) \| Respond to of 10077

Hi. Nice rant. I like rants, as long as they're intelligible, which this one was. May I make a couple of points? Yet the Fed in its omnipotent wisdom decided to push the envelope for another 50 basis points. Which leaves me with a nagging question – WHY? I agree with you that the Fed missed. I won't argue with that. And that the consequences are pretty nasty. But I'm a bit more willing to cut them some slack because I, like the Fed, fear inflation more than I fear what's going on now. I was an investor in the days of stagflation. More precisely, I stopped investing altogether for more than a decade because it was all just too depressing and pointless. Rather than investing, regular people were buying as much as their credit cards could handle so they could pay for their stuff later with cheaper dollars. That mentality became ingrained. Breaking that trend took forever. What's going on now won't take forever to break. We don't hear people talking about a permanent downward trend. Instead, they're looking for the bottom so they can catch a ride on the next uptrend. So while I'm not at all happy with the condition of my portfolio, and I wish the Fed had gotten it right, I prefer to see the glass as half full. Well, maybe one quarter full. Would you believe 20% full? It gets into bigger issues such as privatization of Social Security...those fat bastards in Washington can blow smoke up our ass to keep us funding an outdated POS plan. The big difficulty in getting away from "an outdated POS plan" is always the transition. I recall a couple of years ago when they were pushing the elimination of the income tax in favor of a sales tax, the proponents were asked about how they'd transition, particularly when you had people who had been paying income taxes all their lives, were now about to retire, and would have to pay taxes all over again on that money as they spent it to support themselves. The answer was that the proponents thought people should be willing to take the hit for the benefit of their grandchildren. Yeah, right. Regarding Social Security and privatization, I've never heard any of the proponents say whether this plan to redirect some SSI tax dollars into private accounts was the end objective or simply a transition on the way to elimination of SSI. Rather, I should say, that I've never heard anyone suggest that the proposal was anything other than permanent. The pyramid scheme we have now is inherently inviable over the long term and the politicians who came up with it should be hanged in effigy, but I don't know that the proposed replacement is, either. Perhaps a little delay in privatization will result in a proposal that is a clearer transition to elimination, which should be the objective, IMO. Karen

To: Augustus Gloop who wrote (1923)	7/11/2001 12:55:06 PM
From: Raymond Duray	Read Replies (1) \| Respond to of 10077

Hi Agustus, You inquire: WHY DIDN'T THE FED HAVE THE COURAGE TO ADMIT THEY SCREWED UP EARLIER THAN JANUARY OF 2001? I believe that the FRB had come to the conclusion as of early 2000 that what they did to provide extra liquidity to the system in the face of a possible Y2K panic (by injecting about $500 per household into the banking system in 2H99) had backfired on them terribly. In that the excess cash simply ended up sloshing around in the most volitile of markets, the Nasdaq. So, it was very sensible for that excess liquidity to be removed from the system throughout the first 3 quarters of 2000. The first rate cut in early January, 2001, was pegged to the drastic downturn in NAPM data as of December, 2000. Without this actual proof of the real economy slowing, there simply was no defensible justification for a rate cut. Many of us at SI had found that rather than looking at the FRB's actions, the real story was in the dramatic closing of the spigot in the bond markets as of Q400. This was the proximate cause of the cratering in the NAZ, and not any action/inaction on the part of the FRB. What the financier class realized was that they'd simply been over-enthusiastic about funding the Internet revolution, and the underwriters of equities exacerbated the situation for the retail patzer by offering incredibly (by the standards of the past) immature, risky, venture stage companies to an over-eager retail speculator. Fact is, the FRB is a pawn in the hands of the Wall Street crowd. It is there that the agenda get set. And that agenda has been to play the "new economy" for all it was worth as a gold rush. We all know the history of gold rushes. They end badly for 98% of the participants. And spectacularly well for a handful of observant, clever and manipulative players. This one is no different. On the matter of privatizing Social Security, I'd have to say that Wall Street has shot itself in the foot on this one. The wire houses, always grasping, saw the tremendous cash flows of the SS system and wanted, greedily, to divert as much of that flow through their proprietary system as possible. Alas, they tried to hard to have their cake and eat it too. While they were raking in fantastic fees for underwriting exceptionally dubious IPOs, and selling founder's shares at grossly inflated rates into the public's eagar hands, they disregarded the fact that there is an end to the willing suspension of disbelief in every stock market bubble. Or, perhaps, more callously, they reasoned that a new, bigger fool would come along to replace the one who paid $200 for a share of QCOM, or $330 for a share of AMZN. But I believe they got the time frame wrong. It took a good 30 years for the generation that suffered through the markets of the 1930's to have enough faith in the hucksters and snake oil salesmen of Wall Street to actually make the market vital again. I don't know how much damage Wall Street has done to itself this turn of the carousel, but I believe it is just now that the bulk of the American public are waking up to the fact that equity markets are dangerous and deceptive places. This perception could take a while to remedy itself. I remain in the camp that says we have at least another couple of years of pain, consolidation, angst and uncertainty in the high-tech end of the market. The future, as they say, is on hold. Cordially, Ray :)

To: Augustus Gloop who wrote (1923)	7/11/2001 2:14:37 PM
From: MulhollandDrive	Read Replies (1) \| Respond to of 10077

That's a helluva post, Gloop. If I could distill my thoughts down to the bare essentials, 2 things jump out from your post. Interest rates and taxes. Interest rates continue to fall, we don't really know where the leveling off point will be. You need only look at Japan to see that low interest rates alone cannot "fix" a contracting economy. Which brings me to taxes. My opinion is the best "stimulus" for the economy is meaningful tax reform. The current code is a nightmare and tinkering around the edges only creates a new "donor base" for the 2 political parties. One can only imagine the growth that could be unleashed if taxes AND gov't spending were dramatically reduced. If people have less money being confiscated from their earnings, they have more for discretionary spending AND savings/investing. Our government needs to stop stealing us blind, people should be exercised about the TOTAL amount of our earnings that are being withheld and redistributed. The next election cycle should be interesting. This year 2000 was the first year that 401Ks showed a net loss, and 2001 is expected to be the same. 2002 is an election year and if we don't see the much vaunted "recovery" in high gear, it would be my expectation (my hope) that voters vote their pocketbook. I think we're back to the same fundamental question that characterized the first election of Ronald Reagan, which basically is... "who is best able to manage YOUR money, you? or government? I think how the voters answer that question next cycle will set the stage for a new expansion or regression.

To: Augustus Gloop who wrote (1923)	7/11/2001 6:29:41 PM
From: nolimitz	Read Replies (6) \| Respond to of 10077

Perhaps we were asking the wrong questions in this past election year. Our Senators/Congressmen do not pay into Social Security, and, therefore they do not collect from it. Social Security benefits were not suitable for them. They felt they should have a special plan. Many years ago they voted in their benefit plan. In more recent years, no congress person has felt the need to change it. After all, it is a great plan. For all practical purposes, their plan works like this: When they retire no matter how long they have been in office, they continue to draw their same pay until they die, except it may be increased from time to time by the cost-of-living adjustments. For example, former Senator Bill Bradley (New Jersey) and his wife may be expected to draw $7,900,000.00 over an average life span, with Mrs. Bradley drawing $275,000.00 during the last year of her life. Their cost for this excellent plan is "0", nada, zilch.This little perk they voted in for themselves is free to them. You and I pick up the tab for this plan. Our tax dollars at work! Social Security, which you and I pay into every payday for our own retirement, with an equal amount paid in by our employer, we can expect to receive an average of $1,000 per month. We would have to collect our benefits for 68 years and 1 month to equal the Bradley's benefits. Imagine for a moment that you could structure a retirement plan so desirable, a retirement plan that worked so well, that Railroad Employees, Postal Workers, and others who were not in the plan would clamor to be included. This is how good Social Security could be, if only one small change was made. That change would be to jerk the Golden Fleece Retirement Plan out from under the Senators & Congressmen. Put them into the Social Security plan with the rest of us. Watch how fast they fix it!!! If enough people receive this message maybe a seed will be planted, and maybe good changes will evolve. Don't forget, our girl, Hillary Rodham Clinton, now comes under this Congressional Retirement Plan. Talking about the Clinton's, it's common knowledge that, in order for her to establish NYS residency, they purchased a million + house in upscale Chappaqua, NY. Makes sense. Now, they are entitled to Secret Service protection for life. Still makes sense. Here is where it becomes interesting. A residency had to be built in order to house the Secret Service agents. The Clinton's now charge the Secret Service rent for the use of said residence and that rent is just about equal to their mortgage payment, meaning that we, the tax payers, are paying the Clinton's mortgage, and it's all perfectly legal. How many people can YOU send this to?

To: Augustus Gloop who wrote (1923)	7/11/2001 6:37:35 PM
From: Jorj X Mckie	Read Replies (1) \| Respond to of 10077

Hey Gloopie, I was wondering why we were getting so much traffic over here in da backwater, some nutball must have nominated you for cool post of the day. We are getting some good discourse out of it though. Congrats! JXM