Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : At a bottom now for gold? -- Ignore unavailable to you. Want to Upgrade?

To: Ray Hughes who wrote (1708)	9/24/1998 9:39:00 PM
From: ahhaha	Read Replies (4) \| Respond to of 1911

Consider this reality: Long Term Capital Management. Capitalized. It's an absolute disgrace. A hedge fund getting whacked by a nasty downside. I should say, arbitrage, the riskless way to fly. Only academics and gunslingers could pull off such a complete fiasco. We've got an exploding money supply and the FED is now cornered. They have to pump faster to prop up thievery, incompetence, neo-mercantilism, leftover socialism, and socialisimo. The big bull market has emboldened hotshots to gamble with OPM, and the dominos now have to support the outcome. At the end of the line stands the venerable FED, lender of last resort. In this environment they can't use restraint. The market must plumb the depths and find just how shaky expertism is. Greenspan comes out and claims that the public is sophisticated and prudent: As I have indicated in earlier presentations, the dramatic advances in computer and telecommunications technologies over the last decade have fostered a marked increase in the degree of sophistication of financial products. A vast new array of debt, equity and hybrid instruments, as well as newly crafted derivative products have fostered an unbundling of risks, which, in turn, has enabled investors to optimize (as they see it) their portfolios of financial assets. This has engendered a set of market prices and interest rates that have guided business organizations increasingly toward producing those capital investments that offer the highest long-term rates of return, that is, those investments that most closely align themselves with the prospective value preferences of consumers. This process has effectively directed scarce savings into our most potentially valuable productive capital assets. The result, especially in the United States, where financial innovations are most advanced, has been an evident acceleration in productivity and standards of living, and, owing to the financial sector's increased contribution to the process, a greater share of national income earned by it over the past decade. I don't think anyone apprised him of what was happening. The NY FED and the Board are notoriously uncommunicative. Then we have Yellen. She comes out and says productivity is good. She read the same junk the FED has available, presumably the world's most complete source of info, that Greenspan did. Now they are both misinformed. They look at the past and conclude this or that. That isn't the place to look. The place is in the minds and hearts of the people. The view is black. Now you are going to see the transformation of attitudes that is so critical to assess and determines all those outcomes like rising wage demands. If the root of the leverage problem is at all as deep as the reticence of the Japanese implies, we have one extended period of rapid money growth coupled with the pulling in of risk oriented economic horns. We'll see what that does to productivity. Like Shmershton and Shoals, Yellen and Greenspan will get raises for their skill and insight into the workings of economical systems. Maybe even another Nobel Prize for the foursome. It is especially rewarding that poor people get to reward them for their prudence and frugality.