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

To: DJessen33 who wrote (61130)	5/31/1999 6:28:00 PM
From: Knighty Tin	Respond to of 132070

DJ, His notes are always difficult because he rambles so much and makes sense about half the time. Let me tackle one statement at a time and tell you where I agree and disagree. 1. The Fed buying of coupons is small. But it is all additions to permanent reserves, with no drains. So, it isn't massive, but it is definitely totally one-sided adding to the credit bubble. 2. Treasury demand is influenced by inflation expectations, among many other factors. Other factors include the credit quality and stability of alternative investments, currency prices (they are both a result and a cause of T yields), and expected supply. He is nearly totally wrong on this one. 3. The foreign economies are not recovering. The PR saying that foreign economies are recovering has recovered. Big time. 4. The US is a low savings country in any rational way you can describe it. The fact he may have an explanation from another galaxy does not change the facts. The low savings rate may be slightly overstated, but there is no way that the US is not a low savings rate country. That is flapdoodle. 5. It is wrong to think that foreign buying of Treasuries alters their prices? Huh! Nonsense. 6. And his idea about stock prices is only true in the long run. In the short run, it is totally supply and demand on the margin, which is why so many internut cos. had IPOs with very small amounts of shares. To miss this is to miss a lot. It is not just BS. It is just a bright guy trying to figure out why the overpriced fluff he owns is not really overpriced fluff. <g>