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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: The Ox who wrote (8499)	12/4/2007 8:01:58 PM
From: Hawkmoon	Read Replies (1) \| Respond to of 33421

"They WERE told!" Question.. when the Internet bubble collapsed, followed a year later by 9/11, did not the Fed lower rates? What were the losses to the market from that collapse? We had a trillion dollars in almost immediate losses when 9/11 hit as I recall.. (loss of real property and losses in equity prices).. This occurred over the space of a few months... Have we yet reached that level of loss in the same period with the CDO/CMO markets? From what I understand, the losses in stock equity values far exceeds what is anticipated from the readjustment of real-estate prices. My point is that "they were told" could be just as applicable to then, as it is now... YET.. it was still important that the economy was preserved in order to cushion the blow and not make EVERYONE pay for the "irrational exhuberance" of the others. So let's go off this "high horse" of "told you so" and recognize that the Fed's job is to insure that we all don't wind up as casualties (collateral damage?) in the implosion of the mortgage backed securities market. In sum.. those who speculated in the sub-prime markets need to suck up their losses via an adjusted pricing mechanism, and the rest of us need to be cushioned from the fallout as best as possible in order to preserve the over-all economy. That's my .02 on the matter. Hawk