Actually I have no beef against Greenspan, but consider what is taking place in our economy.* The Internet cuts material costs by greatly enhancing "just in time inventory."* "Just in time inventory" reduces capital strain. Less capital statically tied, and rather dynamically available leads to "just in time capital."* The Internet greatly enhances the ability to move from one job to another, creating "just in time personnel."These three factors, "just in time inventory" , "just in time capital" , and "just in time personnel" feed on one another. The result is massive reductions of waste, or massive increases in efficiency. This will take place for ten years on a global scale, in my opinion.Where our economy needed a dollar to get the job done yesterday, it now needs say 95 cents. Where our economy needed 4 percent unemployment to create a transient work force, it now only needs say 3 percent.Just thought I would express how happy I am to live now rather than any other time in history.Foolishly Bob
I totally agree with you Bob. I'm only 30 years old and already discovered that I really dont have to break my back to make a living. I used to talk to my grandfather and hear his stories of basic survival. Just working like mad and get enough money to buy some bread. Damn!! It makes me think of only one thing: I CANNOT take life for granted. I am very fortunate to be alive today. If the DOW or the NASDAQ is down, if Greenspan says this or that....big deal! I'm lucky that I have extra $ to spend on stocks. Just thought I would express myself too. Have a great week-end.Fooling around (but not too hard)simsim
We all need to remember that in today's economy, with the speed of communication, speed of change, and other such factors involved in the way business is done these days, conditions only take hours or days to make changes that used to take weeks, months, or even years. Stock moves that used to take months often happen in minutes now. Alan Greenspan needs to remember that he is skating on thinner ice than ever, especially with these internet stocks at the prices they are, and one false move can tank the whole market and economy before you can say "Oops!" I understand his desire to avoid letting a bubble develop and get so big that it pops, and I understand his well founded concern about the wealth effect. But if he overdoes it with these interest rate increases, he can tank the market and quickly bring on the very downturn he is working so hard to avoid.
Well one must consider that the rates are required to be lifted by 0.25% to soak up extra liquidity in the marketplace and offset the overall increase in PPI and CPI (which will increase due to oil price lag on the fuel and heating side). Remember that the current rates are those that were prevelant prior to the Long Term Capital Management fiasco and the Asian Financial crisis. Therefoe expect a 0.25% hike and I think personally that the markets have already built the price into the majority of the shares.As regards the markets tanking... do you not think that Alan Greenspan has already acheived this bar a few stocks?Take a look at the advance / decline line for the past 2 years and you will see a disproportionate amount of stocks declining to those advancing. The markets are well off their highs (ex NASDAQ) and are held together by a small number of stocks. It would not take much therefore to manipulate these markets to show bullish sentiment to the majority of investors.Those in the know are already out of the high fliers and are into the earnings or quality stocks awaiting a much overdue correction on the indices. When this happens it will soak up surplus liquidity and then the bull market will start all over again....
I never had the guts to try too many high flyers myself. I always have feared, and fear now, that most high flyers will eventually wind up on the ground as crumpled wreckage. I am hoping to have my stocks go up enough that I can get rid of some of them at good prices, because: A) I don't want to get caught when the bottom falls out, and B) I want to get some more money in the tank to buy the cheap stocks I expect to result from Greenspan going a step or two too far. He may already have done so, but if he hasn't, he will. Even a man of his intelligence is hard put to fine tune a fast moving and changing economy like ours. I think sufficient intelligence to get that job done may only reside in the Man Upstairs, and for any of us down here, even Alan Greenspan, to be confident we can do that borders on hubris. Better he take a more conservative approach and lighten up on his interest rate hiking campaign.
I think April 2000 will be a telling time for the markets. My opinion anyway. Rates will increase but me thinks that a correction on these concept stocks is well overdue.
If the Fed's increase their rates and they are higher than the 30 year T bond rates then take a hot shower as you will feel like death. An inverted yield curve will appear and equity investments will transfer to the Bond markets..... this is the time to worry....http://cnnfn.com/markets/bondcenter/rates.html
That sounds good to me. I think things will get a little interesting at 2:15 today.
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