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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: r.edwards who wrote (4478)	8/14/2002 3:46:03 AM
From: Dr. Jeff	Read Replies (1) \| Respond to of 89467

WRONG! The Fed started raising rates in June of 1999 after moving to a tighter bias on May 19th, 1999. At the time, the Nasdaq was around 2500. During the baby step rate increases, the Nasdaq rocketed another 100% higher into it's ludicrous peak. By the time the rate increases stopped, The Nasdaq was still 50% above the level it was when the increases commenced. The Fed raised a measly baby step 1/4 point on June 30, 1999 to 5% (Naz rallied 2% to 2686) Raised 1/4 on Aug 24, 1999 to 5 1/4% (Naz rallied 1.5% to 2750) Raised another 1/4 on Nov. 16, 1999 to 5 1/2% (Naz rallied 2.5% to 3295) Raised a 1/4 point yet again in Feb. 2, 2000 to 5 3/4% (Naz rallied 2% during the 2 day meeting to 4074) --------The Nasdaq peaked on March 10th with a parabolic Intraday ramp to 5132 (close of 5048)-------- The Fed raised 1/4 on March 21, 2000 to 6% (the Naz closed up 2.5% to 4711) FINALLY, on May 16, 2000, The Fed "boldly" (for once) rose 1/2 point to 6 1/2%( the last rate increase) --- the Nasdaq again flipped yet another bird to the Fed, as it had on every other increase, this time by rallying nearly 3% that day to 3717 (over 100 points). The Fed is not to blame for popping the bubble, THEY ARE TO BLAME for letting it foment and build up for so long. As you can see above, the market just kept rocketing as they attempted to slow things down (FED IMPOTENCE), just as the market is now impervious to the rate decreases, which I might add have occurred with greater rapidity and greater amplitude than the increases. For example, in 2001, there were 3 separate unscheduled rate cuts of 1/2% each. The first surprise cut was on Jan 3rd 2001 which resulted in the biggest one day gains the market has ever seen (Nasdaq alone was up 13%). By April 2001 they had already cut to 4% (well below where rates were before the measly increases began. The Bottom line is the Fed is Impotent and a joke. They never should have let the Stock Market Bubble get as out of control as it did, but they did, and to the point of no return. It would have burst with or without them. Now, trying to stop a falling knife with their easy money policy, they've fomented yet another bubble (Mortgage)...... I could go on and on about this, but a bubble is a bubble is bubble.................. UNTIL THEY BURST!!!!.................. A whole lot more ugliness awaits; especially and most unfortunately for those that don't know how to be prepared (partly due to general ignorance, as well as the constant spam and bogus rhetoric about how great things are) But that's another story for another day. <<<<When Alan Greenspan raised rates in the year 2000 because the economy was "too vibrant" he was wrong. The market immediately began to retrench and even ,plunge in March of 2000>>>> <i/>