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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Cynic 2005 who wrote (7168)	10/16/1998 4:23:00 PM
From: Zeev Hed	Read Replies (2) \| Respond to of 9980

MMV, to ascertain that Greenspan (or the US) are responsible for the meltdown in Asia is to forget about 10 years of monetary/fiscal management in Japan and the rim's nations. Greenspan had nothing to do with the Japanese bubble of the late 80's and the fact that Japan until today has not emerged from under the load of "bad debts" the bubble created. As for blaming Greenspan for a bubble here in equities, I think it is a falacy. Greenspan has kept interest rates artificially high relative to actual inflation for three years running now, that to cool off any possible development of a bubble here. To the extent that you want to call the recent July highs in our equities market a bubble, fine, but the push in the first six months of this year were created by excess capacity flooding our markets as they escaped Japan and the rim, not from excessive easy money here. In final analysis, we will see if AG managed the situation well or not. If the markets over the next few years manage to hold above 5000 and the country is not plunged into a secular recession (or depression, which I doubt very much), AG record will be that he managed the monetary spigot just right, always leaning against the wind with right policy for the time. He averted a major catastrophe after the meltdown of 1987, and so far seems on his way to avert a mini melt here in late October. I would say, so far so good in diametric opposition of your point of view. As always, the jury is still out. Zeev

To: Cynic 2005 who wrote (7168)	10/16/1998 4:42:00 PM
From: Bosco	Read Replies (1) \| Respond to of 9980

Dear MMV - thanks for sharing your view. While I too - I regret to admit to you - am a fan of Uncle Al, life is too boring for everyone to be in unison [except maybe in a real utopia <vbg>.] So your contributions are definitely a good lightning rod. Having said that, I am genuinely puzzled by the profoundness of your statement, "He acted more like a politician who would pulse the public and then act up on them rather than being vigilant on the economy." I don't quite understand the idea of economics without people [or "public".] But then, maybe it's just me [yes, while I have only heard of Prof Sen only 2 days ago, I am already a head-over-heel fan of his, but I digress.] Regarding easy money and bubble, and how much control the Fed has over what the street wants to hype, I haven't had the foggiest idea. OOH, the heavy weights of the stock market are still high by historic measures; OTOH, I ve a handful of stocks that are being traded recently below their cash level [debt factored in.] It seems to me that constant struggle between growth vs value. If inflation is in check, if growth is stagnant, I don't know what sort of vigilance one has to maintain. So, maybe we need to define "what is a easy money policy?" Well, while this may be slightly offtopic, I am sure others won't mind you laying out why you think the world is on the blink [implicitly, I agree with you the influence part of Chairman Greenspan, but not the whole syllogism.] Thanks best, Bosco

To: Cynic 2005 who wrote (7168)	10/16/1998 7:03:00 PM
From: Stitch	Read Replies (2) \| Respond to of 9980

Hi Mohan, Its good to see you poke your head up once in a while. I hope you are prospering and well. <<The latest move by Greenspan proves the point that he is one of the most inept Fed Chairmen ever. In an article he wrote in the sixties he lamented the easy money policies of the Feds in mid 20s which he contends (and I agree) as the cause for the depression in the 30s. I personally think that he managed to repeat exactly the same mistakes.>> I continue to be suspect of comparisons to the twenties and subsequent depression for several reasons, the biggest being velocity. I think AG is dealing with a totally different set of variables then we have seen before and, so far, has done rather well. I am sure you noted Zeev's cautionary statement about the timing of the latest lowering of the discount rate. I too tend to view the discount rate as a sort of ultimate tool, to be reserved for use. Like it or not the greenback remains the sole economic lead instrument and the U.S. the sole leader. You reference stocks as a "speculative asset pile" rendering them with little more character then poker chips. I do not believe that is a a fair analogy. Stocks, in my view, represent investment in real employment and real R&D. They represent also a belief in the future or lack of it. This latter may be the most important facet of the character of stocks for without that belief, then we surely will spiral into whatever apocalyptic future you wish to paint. I think Greenspan has done a fairly credible job considering it is this weight that he must carry, for the world. Best, Stitch