TO ALL THE IDIOTS THAT THINK THAT THE FED IS CONTROLLED, ETC

[steven poser <swp@xxxxxxxxxx>]

I am constantly amazed at what people will believe. What I love best
about folks that believe in conspiracy theories, that the Fed buys
futures (Earl, though I disagree with you on the futures purchase stuff,
you are obviously not in the idiot category.)

Alan Greenspan is the consummate market behaviorist and technical
analyst. I am not suggesting that he sits there and draws lines, looks
at OBV and RSI. But, he may be the only Central Banker in the world who
understands how to mollify the markets. I wrote to my clients back
before the first rate cut that the Fed would go again between meetings
if they only went 25 bps on 29-Sep. I made this call based on how I
thought the markets would react, and how I figured Greenspan would react
to that. The day that the Fed cut again, was the first time I saw
inklings of the market getting ready to turn lower. I think if the Fed
had not cut then, we'd be at 6800 now and not 8600.

Alan Greenspan almost certainly has no great love for Bill Clinton.
Clinton is a Democrat and Greenspan is a Republican. So, Alan is not
saving Bill. He is not saving a Republican Congress either that sits
there and asks for rate cuts also when the economy is humming along. The
FED is and must be fiercely independent.

LOOK WHAT HAPPENS WHEN A CENTRAL BANK IS BELIEVED TO BE CONTROLLED BY
THE GOVERNMENT (OR ACTUALLY IS CONTROLLED BY THE GOVERNMENT). LOOK HOW
ENGLAND AND FRANCE HAVE IMPROVED THEIR ECONOMIES SINCE THEIR CENTRAL
BANKS GAINED MORE INDEPENDENCE. LOOK AT THE FRIGGIN MESS JAPAN IS IN
BECAUSE THE BOJ IS NOT INDEPENDENT.

IF THERE WAS A TRUE BELIEF (AND FOR THAT MATTER REASON TO BELIEVE) THAT
THE FED WAS CONTROLLED BY ANYBODY BUT THE CENTRAL BANKERS, THE DOW WOULD
BE AT 5000 NO MATTER HOW LOW GREENSPAN PUT RATES. THAT IS HOW MUCH
CONFIDENCE WOULD BE LOST. 

OH, AND THE FED IS ALSO NOT CONTROLLED BY WALL STREET. IF IT IS GOING IN
TO SAVE STREET FIRMS, IT IS TO PREVENT A PANIC. I WAS NOT THERE IN 1929
WHEN BANKS FAILED LEFT AND RIGHT. DO YOU WANT TO SEE THEM FALL LIKE
DOMINOES?

Remember, though how Wall Street goes, is not how the whole economy goes
(did you see GDP yesterday? -- AND PLEASE DONT TELL ME THE FIGURES ARE
RIGGED OR I'M GOING TO PUKE), failures are a different story. The
markets are all about psychology, expectations and behavior. Nobody is
better at managing that than Alan Greenspan. If it looks as if the Fed
is controlled, it is only because knows how to pull the strings.

Steve