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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bart13 who wrote (83773)	7/17/2007 11:57:56 PM
From: John Vosilla	Read Replies (2) \| Respond to of 110194

'I do agree that Hoover tried to inflate, but even with that $1.1 billion per chromatic it was like pissing into the wind given the drops in bank credit & M3. etc. The Fed has learned a great deal since then, and fundamentals always win in the end - a fancy way of saying it'll blow up sometime and I don't know when.' The Stock market and Wall Street were the center of power and wealth during that gilded age. 90% leverage in the stock market and record wealth disparity played a huge part as did the fact so much of the country was already struggling for several years before the stock market crash.. Other big factors were restrictions on trade, tarriffs plus a restriction on immigration in that era and tightening of short term rates that went too far. Obviously trade and budget surpluses like China has today didn't matter much in avoiding a crash and subsequent depression..

To: bart13 who wrote (83773)	7/18/2007 5:52:43 AM
From: shades	Read Replies (1) \| Respond to of 110194

I do agree that Hoover tried to inflate, but even with that $1.1 billion per chromatic it was like pissing into the wind given the drops in bank credit & M3. I am hoping ORK has the rothbard book and can look up some info for us - if the banks had not taken the 1.1billion to shoulder up their reserves but used the money the way hoover wanted them too - is it possible that hoover would have kept on printing? etc. The Fed has learned a great deal since then, and fundamentals always win in the end - a fancy way of saying it'll blow up sometime and I don't know when. Chromatic said the fed has learned a lot more, and bernanke is a great student of the depression - that they won't make those same mistakes (possibly new ones) - that the housing bubble is the last to inflate - chromatic is in washington DC now working on fiberwire installations so that traders can get their data feeds a few nanoseconds faster. I don't own a house and wouldn't HELOC it for gold if I did. You know Russ said this too - that he doesn't have a house. Have houses become too expensive for you and him that you can't purchase one? I always had the impression that you and russ were capitalized better to be able to afford to own your own house. Where you live - is the median house that high? I consider assets like it part of a "core state" and am conservative. Leverage is the ticket to big gains and big risk according to money mogul - and lots and lots of debt and OPM. I'm also primarily a futures trader so significant leverage is very familiar to me, and it's not terribly unusual for me to run 4x+ leverage against my entire net worth. I cannot imagine having 4 times my net worth leveraged at the beck and call of wall street casino crooks. That does not sound safe and goes against every investment principle I have learned. Even when I was much more aggressive back in 97 I never risked more than 20% of my net in one trade. In other words, I do put my money where my mouth is when the trade looks good... Bart after the blowup in 29 - what percentage of traders had to leave the business? How many traders were there before the bust - and then after the bust? I would like to see a chart of trader employment levels from 1900 til today if you can dig up the info. It has been my understanding as program trading had increased - trading as a profession is drying up. Also I would be interested in what you think these new rules relating to margin debt reserves are going to do if everything does indeed blowup and we have a big backlash in congress about how much leverage can exist in the system. Certainly one of the fundamental problems is the moral hazard of guys trying to leverage out too many levels trying to eek out that last bit of spread.