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

To: Mike M2 who wrote (50936)	3/9/1999 2:46:00 PM
From: Eggolas Moria	Read Replies (1) \| Respond to of 132070

I appreciate the historical reference, but I don't believe that we are in a situation of great enough similarity for such comments to be particularly useful in determining an investment approach. By 1929, the Fed was in some ways, trying to offset the horrendous decline in real estate prices caused by the bursting of the Florida real estate balloon. Large amounts of money coupled with exceptionally low margin requirements (10%) and the proliferation of investment trusts (leveraged 3:1) buying other investment trusts as investments (also leveraged 3:1) resulted in a nice stew.<g> I would agree that we've seen financial asset inflation and I believe that the Fed would probably agree, but I don't believe that it's on the order of 1929 or that the system is as frail or as fraught with peril. In fact, we are not as vulnerable as Japan in 1989 either, IMNSHO.<g> The real estate leverage isn't anywhere near the same. Didn't David Babson also have to endure some disparaging comments for a little while?