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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: N who wrote (25470)	9/18/1998 5:41:00 AM
From: Cheryl Galt	Respond to of 32384

Nancy, Thanks for providing the original document. I like the way Greenspan writesÿ ---clear, readable -- with no acronyms or heavy economic terms. What strikes me is how most of our analysts and "news" shows spin Greenspan's words by pulling things out of contest, then reading between those extracted lines.ÿ Sounds to me like he said NOTHING AT ALL about changing interest rates.ÿ I ran a Find command through the paper, and got only two hits on the word "interest."ÿ And those hits used the word "interest" in an unrelated context. --------------------------------------- It seems to me, Greenspan mostly talked about o Appropriate due diligence needed by both emerging-nation borrowers and their foreign lenders. -----(Avoidance of reckless international borrowing.) o The importance of reinforcing the capabilities of banking supervision in emerging market economiesÿ --in the areas of transparency, timely data,ÿ and more sophisticated risk evaluation systems o The ineffectiveness of controls on foreign investment that insulate the emerging country from international financial flows o The ineffectiveness of short-term patchwork solutions o GOOD News: "The MOST AFFECTED emerging East Asian economies, despite the sharp contraction in their economic output during the past year, have retraced, on average, ONLY ONE-SIXTH of their per capita growth over the past TEN YEARS." ------------------------- IMO, The ONLY comment related to interest rates referred to the 19th Century, and indicates that those earlier restraints are too inflexible for today. I suppose the following quoted section is the one the WSJ latched onto to deduce that Greenspan did not recommend that "interest rates adjust promptly to evidence of such mistakes..." ------------------ Greenspan: "Investors will, on occasion, make misjudgments, and borrowers will, at times, misread their capabilities to service debt. When market prices and interest rates adjust promptly to evidence of such mistakes, the consequences of the mistakes are generally contained and, thus, rarely cumulate to pose significant systemic risk. There was some evidence of that process working in the latter part of the nineteenth century and early twentieth century when international capital flows were largely uninhibited. Losses, however, in an environment where gold standard rules were tight and liquidity constrained, were quickly reflected in rapid increases in interest rates and the cost of capital generally. This tended to delimit the misuse of capital and its consequences. Imbalances were generally aborted before they got out of hand. But following World War I such tight restraints on economies were seen as too inflexible to meet the economic policy goals of the twentieth century. " --------------------------------------- Nancy, You're the economist. What's your take? Do you think he said anything about interest rates?? Cheryl PS Sorry to be late to this discussion. -----I've been detained away from my PC for a couple days.