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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: Zeev Hed who wrote (96634)	7/21/2002 10:23:30 AM
From: DebtBomb	Read Replies (1) \| Respond to of 99280

The bubble was created by the lowering of rates and increased liquidity while the economy was growing at a 4% clip, just to bail out LTCM's !@#, IMO. IMHO, creating bubbles are worse than letting some dumb !@# hedge fund get what they deserved. So who's paying for the LTCM bail out?? Think about it.

To: Zeev Hed who wrote (96634)	7/21/2002 10:54:31 AM
From: DebtBomb	Read Replies (3) \| Respond to of 99280

Zeev, IMHO, you haven't seen anything yet my friend. We are now pretty much bail-out resistant. How many rate cuts have we had, LOL, I lost count, we've had 13 rate cuts, the combination of which has done nothing, all have sent us lower. The Fed is running out of blanks. Stocks are almost more expensive than at any other time in history, the bubble caused this, IMO. pssssssssssss, what's that hissing sound?? There's no growth in the future IMO, uh uh, not with record debt my friend, consumer shot a wad already. Sure, we'll get that bear market rally someday. But, before this all over, IMHO, valuations will return to normal. ;-)

To: Zeev Hed who wrote (96634)	7/21/2002 11:21:28 AM
From: SGJ	Read Replies (1) \| Respond to of 99280

Ask the Japanese bankers how that theory is working

To: Zeev Hed who wrote (96634)	7/21/2002 12:01:49 PM
From: Jack Clarke	Read Replies (1) \| Respond to of 99280

Zeev: RE: I don't see that the margin requirement had much to do with the bubble, I appreciate your usual thoughtful and cogent analysis. Substitute "raise interest rates" for "increase the margin requirement" in my argument, and I resubmit my proposition that he could have stopped the bubble, which he recognized, before it became so great, producing the eventual (Austrian Economics) greater "bust" phase after the preceding excessive boom of malinvestment. Perhaps your hypothesis for Greenspan's motives is correct. If so, he has done what he thought was best. But I am not so sure his motives were so pure. Call me a cynic, but I wonder, for example, if he did not make a "devil's bargain" with the brokerages he cobbled together to bail out LTCM in 1998 (to the tune of 3.6 Billion bucks). As I remember it, it was only two weeks later, when, on expirations day, after the bond market closed, he announced an unexpected interest rate cut. I really wonder if those brokerages had been tipped off and were all long S&P futures contracts? If so they got back their money quickly. Best wishes, and I am joining IHub to follow you, by the way. Jack

To: Zeev Hed who wrote (96634)	7/21/2002 6:00:07 PM
From: yard_man	Respond to of 99280

>>The current "soft landing" approach, which really, so far has not even caused a net decrease in GDP YOY, seems a better long term choice<< What soft landing?? -- there'd be no soft landing at all as measured by GDP if it weren't for a massive tax cut and acceleration in fiscal stimulus? Any idea what GDP series would be for the past few months without those?? Let's revisit the term "soft" this time next year and see if we can get it defined properly.

To: Zeev Hed who wrote (96634)	7/22/2002 3:02:15 AM
From: LLCF	Respond to of 99280

<I don't see that the margin requirement had much to do with the bubble, now that most stocks can be bought on margins of less than 10% through the options market, why even use margins? I think that they did not act on the margins for that reason. > This is absolutely 100% wrong IMO... the fact is many people DID use margins, and also many people DONT ever use options. As for Greenspan... his keeping rates artifically low over long periods of time allowed the bubble to keep growing. There is nothing to do now but let it work itself out. His choices are clear: 1.) 1930 style... ie. debt implosion creates deflation. 2.) 1920's [Germany] style... wheelbarrows full of money... ie. the fed just keeps buying whatever they have to to avoid #1. There's nothing he can do now to slide nicely into a normal state again. The economy is WAY to highly levered. The debt numbers public, private, consumer, business are staggering. DAK