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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (44645)	1/27/1999 10:21:00 AM
From: Cynic 2005	Read Replies (2) \| Respond to of 132070

Mike, re. stock buybacks - here is an interesting link. #reply-7507615

To: Knighty Tin who wrote (44645)	1/27/1999 10:32:00 AM
From: Tommaso	Read Replies (2) \| Respond to of 132070

More evidence from and about the Fed: stls.frb.org The replacement for the old M1, MZM, was growing at 15% at the end of last year. This fully explains the continuation and acceleration of the stock market bubble. The Fed allowed this in response to declining commodities prices and in an effort to accommodate the financial houses that had become vulnerable to a sudden monetary contraction. The freely available credit has been used to speculate. Notice that the last time this happened was in advance of the 1987 crash, which occurred as the Fed tried to restrain further monetary growth. We do not know what the Fed is doing right this minute, but we do know that if they allow money growth like this to continue, there will be a falling dollar and inflation. And we also know that they do not like inflation. And we know that they know that this kind of growth cannot continue indefinitely without inflation. We therefore know that at some point there will be some degree of restraint. And when that occurs, it will be very hard to prevent a severe decline in equities markets. But since monetary growth was continuing as recently as a month ago, the really severe decline in equities could be up to a year away--though in my view it could begin any time that perceptions shift, whatever the Fed may have done most recently. At that time those tempered, moderated, indirect, almost veiled pronouncements by Greenspan will seem to have been ghastly utterances of an oracle, preserving his reputation until a future generation of economic historians recounts exactly how badly the Fed has misjudged and mismanaged things in the later 1990s.