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

To: Ilaine who wrote (13974)	1/27/2002 8:00:19 PM
From: Maurice Winn	Respond to of 74559

<The impression I get is that it's sort of like oiling a huge machine. The machine will come to a halt without oil, but otherwise the oil doesn't make much of a difference in what the machine does. To state the obvious, the machine is the economy, and money is the lubricating oil.> CB, I just love your analogy [and was going to use it myself but thought I was biased]. Having spent a decade dabbling in lubrication of a LOT of equipment, from the -32 deg C winter climate of Canada to the +32 degree hottest days of New Zealand, I really appreciate the analogy. While the core business of lubrication is to be slippery and friction-free, it isn't quite that simple. For a start, selecting a supplier is vital. It's on the bad days, when things aren't going right, that the supplier under pressure becomes important. Is their quality control good? Will they show up on time in an emergency? Are they financially stable and will provide continuous service? Is the oil too viscous, causing fiscal drag and overheating? A big, expensive machine, producing huge output, needs a very reliable, high quality lubricant. The cost can't be excessive or competitors will take over. Ah, it all comes back. The good old days. I don't want to write a book just now, so I'll leave it at that. Mq

To: Ilaine who wrote (13974)	1/28/2002 5:50:39 AM
From: smolejv@gmx.net	Read Replies (1) \| Respond to of 74559

CB - I was off waves for the weekend, but hope to keep the subject going. My question was >>if Fed wanted to,could it put out the M3 brushfire<< economagic.com This stuff is an elegant, no-bars-attached exponential curve with cca 15% y-2-y rate (Mq, one fact to think of when composing the next Hobbitland bedtime story). The first time I saw it in Noland's articles. And I kept seeing it again and again. So much for a stopped clock, CB (have to rub it in, otherwise there's no subcutanenous effect). This M3 pool is the feeding ground for everything that GSEs (among others) bring out to the market as solid, full-proof, nearly-as-good-as-backed-by-government investment vehicles. And, if I understand you right, this is nothing that FED would have, need (or want) to control. Checking question: Where does the credit deluge - mortgages for new houses with no downpayment, credit cards for kids playing in the little league (credit limit 25k$), etc - come from? You guessed right. dj