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Pastimes : Ask Mohan about the Market -- Ignore unavailable to you. Want to Upgrade?

To: Haim R. Branisteanu who wrote (8973)	11/22/1997 2:28:00 PM
From: Bonnie Bear	Read Replies (1) \| Respond to of 18056

The NYSE would not be choosing breakers at 10% and 20% drops as they did on Friday if the market were as correctly priced as dame Abby claims.

To: Haim R. Branisteanu who wrote (8973)	11/22/1997 2:38:00 PM
From: Joseph G.	Respond to of 18056

Haim, I'd expect the feds to bail out major brokers/investment bankers, or find solvent institutions and give them enough incentive to take over the insolvent ones. It's not the speculators they care about, but the institutions. But institutions can't stay in business if they do not honor their contracts. BTW, A Senate Econo subcommittee is urging the Fed to CUT it's rates very soon ... Joe

To: Haim R. Branisteanu who wrote (8973)	11/22/1997 2:50:00 PM
From: Tommaso	Read Replies (2) \| Respond to of 18056

I finally took a look at Greenspan's 1966 essay on the gold standard that is in Ayn Rand's anthology of writings of capitalism. Found it in Barnes & Noble when I went for a Barron's a couple of hours ago and read it on the spot. I wonder how much Greenspan has changed over the years. To judge from that essay, he'd rather have us all poor, honest, and credit-card-free except for those of us who held large bank balances in gold-backed dollars. No welfare, and probably not even any social security. No, I am exaggerating; probably it's really closer to Hayek libertarianism. But there was no question that he really liked gold back in 1966. Even if he has mellowed a lot (if that is what happens to fiscal reactionaries), if this is the same Greenspan he wouldn't mind seeing some hard times, or at least some definite deflation--enough to set us liberals squealing. It might be possible to do this without even raising interest rates. I mean, look at how right now, U.S. interest rates are 3-4 times as high as the Japanese. In that essay (or in the other one of his in that book) he actually argues that while the US was really on a gold standard, economic contractions were sharp but brief and everyone picked up and went on. He seems to think that going off the gold standard helped make the Depression worse. Instead of seeing the Great Depression as a final convulsion that made it necessary to get off the old restrictive currencies. Until I read that essay I had thought of Greenspan as a largely benign continuation of Volcker. Is there anything to suggest that he is not a closet gold-bug? In any case he certainly isn't going to stand in the way of a stock market collapse. The good old days!