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

To: Ilaine who wrote (11838)	12/13/2001 8:10:20 PM
From: Louis V. Lambrecht	Read Replies (1) \| Respond to of 74559

cb - the Fed wants the "netting" law more badly than to reform the bankrupcy law. "Netting" would allow a brokerage or investment bank to balance the account (mainly derivative accounts) of a defaulting customer before chap11 or bankrupcy. Could have helped ENE.

To: Ilaine who wrote (11838)	12/13/2001 8:51:19 PM
From: LLCF	Read Replies (2) \| Respond to of 74559

<but they differ on whether the Fed could have done anything to make things better after the thing started. Friedman&Schwartz said yes, Austrians said no.> That's what I mean... it's clear to me that there has been the classic mal-investment and all that... if the fed saves things it's quite a feather in the monatarists hat. Alternatively if we continue to spiral down for another year or two IMO it would be hard not to hand a huge plate of cookies to the Austrians. Just my take on things, possibly the first such test since the 30's. <But there would be alternative hypotheses, e.g., that institutions which were put into place during the 1930's help the financial system manage systemic shocks. The SEC does prevent some of the outright fraud that is endemic in markets; deposit insurance should prevent bank failures; mortgage insurance may stop the debt-default-deflation avalanche from taking everything down with it. Etc. etc. etc.> Certainly even I would not expect soup lines... wheelbarrows on the other hand are not out of the question. <VBG> Time will tell, this is the way I see it... if we recover, the Austrians are discredited, if things get worse than everyone expects [excepts me :)], IMO the Austrians have it exactly right. DAK