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Non-Tech : Tulipomania Blowoff Contest: Why and When will it end? -- Ignore unavailable to you. Want to Upgrade?

To: Sir Auric Goldfinger who wrote (666)	1/13/1999 10:49:00 AM
From: Zog	Read Replies (2) \| Respond to of 3543

It is amazing how these tulips have recovered! Guess it is from growing in s#$t! Michael

To: Sir Auric Goldfinger who wrote (666)	1/14/1999 6:23:00 AM
From: Hiram Walker	Read Replies (2) \| Respond to of 3543

Auric, this has not broken yet. We need to see a European Meltdown due to the deflationary pressures of the EURO(can this be price parity?).Anyway a good clip from Stephen Roach on Greenspan's blunder. ms.com Half way around the world, the United Sates is faced with a financial engineering challenge of its own -- the perils of an increasingly risky equity bubble. A little over two years ago, Fed Chairman Alan Greenspan warned of an "irrational exuberance" in the US stock market that could only end painfully. In that broadside he was quite explicit in cautioning that Japanese-style Aftershocks could occur, if and when the American bubble ever popped. Liquidity-driven investors were quick to call the Fed's bluff. Apart from a minor 25 bp tightening in March 1997, the central bank resisted the temptation to deploy its policy arsenal in an effort to prick the equity bubble. Then along came the global currency crisis, which triggered the extraordinary combination of a massive surge in liquidity creation and plunging long-term interest rates. Apart from a few momentary dip-buying opportunities, the stock market has never looked back. Some 3,000-plus Dow points later and it is painfully clear how quick the Fed was to back off from its campaign against the stock market. The newfound rationale rested on an apparent "rethinking" of the unrealized earnings potential of a revitalized, restructured, and super-competitive Corporate America. In other words, the Fed chairman argued that if valuations were reasonable, there probably wasn't a bubble after all -- ergo, why worry? All this underscores the futility of using macro policy tools to manage financial markets. If the Fed had stayed with a classic "old paradigm" posture of leaning against the inflationary potential of a fully employed and rapidly growing US economy, then it would have undoubtedly engineered several additional tightenings later on in 1997. The stock market would have most certainly corrected, with investors banking on an interest-rate induced slowing of GDP growth that would have taken a classic cyclical toll on corporate earnings. But the Fed, instead, gambled with an out-of-character "new paradigm" bet that resulted in an unusually constructive interest rate climate, which provided powerful support for stocks. Does it make sense to criticize the Japanese for meddling in the markets and also criticize the Fed for not doing so? The point is that it pays to stick with a fundamental discipline. In my view, the Japanese authorities are wasting money in attempting to talk down the yen. Instead, Japan needs to recognize that it must finally respond to a stronger currency by embarking on a long overdue restructuring of its markets and corporations. And the US central bank has now boxed itself into a very treacherous corner -- possibly mistaking a temporary improvement in inflation for a paradigm shift. By fixating on markets and losing sight of fundamentals, policy makers can only compound risks in an already treacherous climate. Pick the European nation to collapse first,I am leaning toward Turkey(maybe I am mistaking hunger for food,with hunger for market corrections?),then a major nation like Germany. Hiram