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To: Edmund Lee who wrote (22190)	10/23/1998 10:42:00 AM
From: Follies	Read Replies (2) \| Respond to of 116791

Bow Tie Jimmy said it, he has been talking that way for years. His predictions have not been very accurate but he makes for good TV. I agree that GSpam bailed out his friends and I think it is a very slippery slope. THe more intervention, the more rigged the game is and then liquidity dries up. No one trusts anyone else, everyone keeps their money in the mattress and we are back to the dark ages.

To: Edmund Lee who wrote (22190)	10/24/1998 3:46:00 PM
From: Alex	Respond to of 116791

Maybe The Sky Really Is Falling by John Tompkins October 22, 1998 -- This week, the stock market joyfully rocketed higher and higher each day in a frenzy of investor optimism. The cause: last week's surprise cut in interest rates by Federal Reserve Chairman Alan Greenspan -- the second cut in less than three weeks. Wall Street's economic pundits confidently agreed that interest rates would be sliced again at the Nov. 17 and Dec. 22 Fed board meetings, and again and again and again next year until any threat of recession disappears. Investors naturally reacted to the news with rational exuberance since it seemed that the veteran inflation fighter had finally been won over to the bull side. Some even suggested that Greenspan acted to keep Bill Clinton in the White House by wagging the interest rate dog to keep the market bubbling. We doubt that. But Chairman Greenspan has been saying and doing things so far out of character that we worry over his emotional state -- and the future of the world. Greenspan slashed rates last week almost on his own authority. He talked with five Fed governors on a conference call shortly after noon EDT a week ago and issued the order a few hours later -- after currency and bond trading had stopped for the day. This is simply not the way Fed Chairmen act. As a young reporter, we covered the Fed and got used to the exceptionally careful way officials acted and the opaque Mandarin English they spoke. They were aware that the slightest hint of anxiety could send markets crashing worldwide. And here we have the sober and dependable Chairman Greenspan explaining to Congress that the Long Term Capital Management hedge fund had to be saved because there was a 50% chance that "the whole [U.S. financial system] would unravel." He also admitted that possibly "hundreds" of other tottering hedge funds might be out there threatening banks, brokerage houses, insurance companies, pension funds, and even universities with ruin. Back in the early '80s, when banks were failing in large numbers, the then-Fed Chairman Paul Volcker never hinted at how serious the problem was. His speeches and testimony to Congress were so larded with economic jargon that it was hard to tell what he thought about anything. Which is precisely what he wanted. Greenspan has broken with that tradition and begun to speak in basic English. He scares us. His warnings of danger to Congress, the crisis move to stave off the bankruptcy of LTCM, the emerg ency phone call to Fed governors all suggest he's aware of an impending doom too terrifying to describe. In explaining the reasons why LTCM had to be saved, Greenspan briefly compared it to the panic of 1907 when J.P. Morgan convened the leading bankers and Wall Streeters of the time in his library, locked the door, and told them what it was going to cost each to keep the crashing market from causing a major depression. When some complained that it would mean dangerously dipping into reserves, Morgan roared, "That's what they're for!" There are times when it may be better not to know what dangers lie ahead. After all, the worst may not happen. We can understand why investors are cheerful and they may even turn out to be right. But, don't say we didn't warn you. #### End of Story talks.com