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To: BGR who wrote (45122)	6/4/1999 4:42:00 PM
From: Cynic 2005	Read Replies (5) \| Respond to of 86076

The Feds, especially the elected officials, are ALWAYS on the side of the longs. In fact the biggest force the realists (I wouldn't call them bears) have to fight is not mania, it is the Govt manipulation of free-markets from fear of the "lynch mob" mentality. That doesn't mean they will come out an rescue every Tom, Dick, and Harry. If Venky is about to lose several hundred thousand $$$ due to his stupidity, it is not of major concern to Greenspan. But if he is clever enough to screw the system with a "systemic risk," I bet Greenspam would be on his side. Just as they were in October. The Feds and the Govt. made a blunder of interfering with freemarkets reaching an equilibrium on its own. If BT goes bust due to DE Shaw, of Goldman goes bust due to LTCM, so fckin what? The consequence of the Fed interference is that LTCM dopes ended the year with big fat bonuses. That action injected a sense of invincibility and a big dose of arrogance in to bulls. With all due respect, you may be in that group as well. Now, if a big majority of people lose a lot of dough in the markets due to this false sense of invincibility, there is only one body to be blamed. The Feds. Had the markets taken their natural course, it would have been improbable that Dell would tack on to 55 and it would have prevented the likes of Venky from stupidly buying Dell on margin on the way up without accounting for a possible dip to low 30s. If the markets were to fall in October in stead of now or a little later, in all likelihood the damage for individual due to margin trading would have been much less. In August, I don't recall such grave whining about margin calls when the markets were only down 5-10%. Now, the major averages have not even breaken down, but the pain appears to be much intense. Sure, the Feds didn't tell the guys to go out on margin and buy Yahoo and the like. But for them to pass the blame like that amounts to a father passing the blame on kid for his doing drugs with the $100/day allowance. Where do the GOVT stats lie in this picture. Every bit they count. I am 100% convinced that Bill Clinton is the slimiest bastrd ever to lead this country. An intelligent, slimy and cunning bastrd, if you will. He is the one who said "It is the economy, stupid." He knows where his strength lies. Not that I am claiming he is responsible for this bubble economy. But he is smart enough to take advantage of the worldwide economies converging to bubble standards. He doesn't mind if this is a bubble economy. As long as he rules, if he can help it, he will feed the bubble and stay popular. After all, it is the DOW average that kept his ratings up, not the spill over Blue Dress. He knows that. Early in his Presidency he ordered a revisal of the way employment rate is computed. Seasonal "adjustments" were adjusted. Besides, there is a lot of wiggle room for the "estimates" on jobs created by small businesses. A long time ago a link was posted on this thread where an economist dissected the BLS employment. WHat he found our is that a 9 month average of monthly employment numbers, when annualized, is an exact match to the number of jobs Slick promised during the election campaign? You may call it a coincidence. I don't. Re. the debate on shorts and longs, one does not need to look back at decades of history. Just look at the past few years. Short sellers were the target of attack by Malaysian Govt. (it is never their Govt fault). As recently as 1997 Japan imposed restriction on short sales. In 1998 Hong Kong did a blatant (overt) manipulation of markets by buying securities! Whom did they blame for meltdown in Hong Kong market? The short sellers, of course! Little do these idiots in the Govt know that shorts sales account for about 2% of the market. In the first place, short sales were allowed for liquidity reasons, not out of love and respect for what they call "evil shorts." In normal markets all the mechanisms work the way they are designed to work. When Govts and central banks manage to screw-up as big as they have in the recent years, their and the masses first line of attact is "evil shorts." Markets crash for one and only one reason. When the longs sell/liquidate their holdings* for whatever reason (be it completely out of whack risk-reward ratio, illiquidity, extremely over-valued situation, mania like environment.) This happens at a time the conditions are ripe for lack of bids, a.k.a. no buyers (proverbial, "sell to whom?") Markets do not go down because of short-selling. On the contrary, markets can go up dramatically (witness Jan-April climb) because of short-selling and subsequent squeeze. Short sales have a lot of restrictions. Bear-raid is not only illegal but also impossible due to the uptick rule. No law prevents the likes of Jeff Vinik from orchestrating a short-squeeze