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

To: ForYourEyesOnly who wrote (60463)	5/24/1999 10:39:00 AM
From: Knighty Tin	Read Replies (2) \| Respond to of 132070

THC, The rate cuts, in and of themselves, were probably necessary to save the system. At least the first two. The third was overkill. But the rate cuts put a bandaid on the symptoms while making the disease worse. The rate cuts and strong controls on derivative trading, stock market margins, and hot money might have been sensible. Without those measures, they were totally reckless. For example, LTCM was not only bailed out, the folks who caused the problems that almost took down the financial system earned huge bonuses for their "performance." That is criminal. And, yes, it was a good thing that Citicorp and Chaste and Merrill did not go belly up. But it was a bad precedent that they didn't pay anything for taking too much risk. They not only did not go bankrupt, but they temporarily prospered. Those banks and brokers who were too smart to take the risk they took look like dummies in comparison. A horrible precedent to set. So, why set it? I think of one obvious reason. How did the Congressional elections turn out with Clinton near impeachment? So, I wouldn't have screamed, or at least not as loudly, if the Fed had bailed out the financial system and slapped their wrists about taking insane risks. Instead, they bailed out the system and rewarded them for taking insane risks. So, guess how they are managing their assets today? <g>