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 : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: tradermike_1999 who wrote (9133)	9/14/2001 11:57:25 AM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 74559

To say nothing of the issue of moral hazard. Once again, the government is trying to bail out wild-assed speculators on their bad bets. In a nutshell, it prevents proper discounting of owning risky assets. Speculators (including many large and powerful financial institutions) have come to look at this sort of activity as an entitlement of sorts. The problem is in the long term assets, like water, seek their own level. As more and more people come to expect this sort of treatment, a trap is constructed, whereupon IF the government, for whatever reason, is unable to come through in the future then numbers of people affected and amounts of wealth destroyed will be maximized. That's how so many people got burned in the Bubble collapse we've just witnessed.

To: tradermike_1999 who wrote (9133)	9/14/2001 1:07:49 PM
From: westpacific	Respond to of 74559

Mike, your right, a rate cut is a BIG MISTAKE. As we have talked so often, all this will do is prolong what has already begun, this event does not change what had already begun. My biggest concern with further rate cuts is two fold. First it takes away the last safe haven that Seniors and Amercians had for investing in this trying market. Money Funds will no longer keep up with inflation and not offer rates of return for many to live off the income. It forces seniors to take bigger risks with their capital. Second it just rewards risk taking and speculation, it rewards taking on further debt. It takes away conservatism, safe investing and smart money managment. Just one more mistake of many that in the longer run will make this downturn longer and worst than otherwise may have been. All the best West