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Greenspan is VERY much a responsible party to the position this country is
in. In the early 1990s, the Fed, in an effort to reliquify a
balance-sheet-troubled banking system (due to shoddy lending practices), cut
interest rates drastically, engineering the steepest yield curve in decades.
Banks were able to borrow short-term and pocket up to 5 percent in profit
from loaning to the bond market at the higher long-term rate. The Fed also
inflated the monetary supply.
Here we are today with: Bankruptcies at record levels, savings rate at
record lows, corporate/personal/government debt at astonomical levels, real
wages below 1970s levels, trade deficit at astonomical levels. Consumers
(which make up 2/3rds of the economy) are BROKE; studies show that 25% of
Americans have less than $1,000 to their names, another 25% have less than
$5,000. HALF of the US population are a few paychecks from the street.
Real estate prices are at astronomical levels (especially on the East & West
Coasts), equity prices are still high (Nasdaq avg P/E over 100). In Silicon
Valley, prices have vaulted over 70% over the last two years.
Banks leveraged to the hilt, for example: Freddie Mac and Fannie Mae now
have issued bonds totalling over $7 TRILLION, backed by mortgage debt.
Remember the S&L crisis which blew up 1.5 Trillion in questionable real
estate loans. When (NOT IF) this economy goes south, tens of millions will
lose their jobs and default on these mortgages, making the taxpayer likely
to be given the big screw in the way of bailing out Fannie and Freddie.
Real estate prices are so out of touch with reality in California, loans are
no longer based on appraisals, just the 'ability' of the applicant to pay
his/her monthly payment. The debt/income levels have been relaxed to 50%,
up from 26%.
Bank lending standards have been deteriorating for years, this year alone,
we had the largest ever series of bank failures take a large chunk out of
the FDIC fund.
More info on the massive debt levels and the mother of all banking crisises
that is coming when FNM and FRE default on their $7 TRILLION in bond debt.
If you think the ripple caused by LTCM was big on the financial markets, try
a multi-trillion ripple from FNM and FRE. Even legislators are worried
about this event. What's even better is, they want to push out another $2
TRILLION in the next year for more (even more questionable) mortgages. "We
are in the American Dream Business" -- will be -- "We Helped Bring You Your
Worst Nightmare".
http://www.geocities.com/WallStreet/Market/8553/loanbubl.htm
Government Debt Levels (even during this so-called BOOM time, the
government has paid down VERY little of the $6 TRILLION in debt, not to
mention the $10 TRILLION in unfunded Social Security liabilities fast
approaching.)
The Govt. Explains the Virtues of its Massive Debt:
http://www.frbchi.org/pubs-speech/publications/BOOKLETS/public_debt/public_d
ebt.html
http://home.earthlink.net/~arison/debt.html
I give my clients the real deal, (let the empty suits on CNBC candy-coat and
lie to the lemmings) give them access to reading materials so they can
prepare themselves when the veneer of this so called 'new' economy wears
off, as it already is, as the dot-coms fail, and hapless (hopeless,
clueless) 'investors' lose their retirement money and life savings. If you
manage money for clients, do them, and yourself a favor, and do some reading
on the economic history and familiarize yourself with the hard numbers,
before it is too late.
James Taylor
http://www.techtrading.com
----- Original Message -----
From: "SCOTT WINSKI, APS FINANCIAL CORPOR" <winski@xxxxxxxxxxxxx>
To: <REALTRADERS@xxxxxxxxxxx>
Sent: Tuesday, November 28, 2000 2:21 PM
Subject: Fwd: Re: [RT] Alan Greenspan
> Alan Greenspan and his crew are in the unenvious position of walking a
tight
> rope between significant inflation and recession. We do not have bad
inflation
> and we are not in a recession. The Fed has been very successful in
keeping
> their balance. In addition, we are in the longest peace time expansion
since
> World War 2 thanks to Greenspan. To say that we will face the worst
financial
> crisis ever is reaching...............................you act like this
already
> is happening. If the economy slowsdown, with interest rates as low as they
are..
> it wouldn't take too much easing to jumpstart. We seem to be in a nice
> equilibrium. I wouldn't be a doomsayer just yet....
> ---- Original Msg from: Scott Winski <realtraders@xxxxxxxxxxx> At: 11/28
11:32
>
> How about getting very specific on your thoughts regarding Alan Greenspan.
> ---- Original Msg from: James Taylor <realtraders@xxxxxxxxxxx> At: 11/28
10:44
>
> It would be a blessing. This guy is made out to be some sort of deity,
when in
>
> fact, he has put this country on a crash course with
> what could be the worst financial crisis ever in this country. His
wreckless
> monetary and interest rate policies, put in place to stave off massive
bank
> failures will result in more personal bankruptcies, corporate
bankruptcies, and
> finally bank failures then would have been the case if he would have had a
> prudent policy. If you don't know this bozo's track record, you will keep
> putting him on a pedestel.
> Once you know the real deal, you will dare mention the traitor's name. He
will
> (eventually) be remembered as the worst Fed Chief in America's history,
when the
> day is done.
>
>
>
> ----- Original Message -----
>
> From: Neil Kerr
> To: realtraders@xxxxxxxxxxx
> Sent: Tuesday, November 28, 2000 7:16 AM
> Subject: [RT] Alan Greenspan
>
>
> If something were to happen to Mr. Greenspan, who would be his
replacement and
> how would that person be selected? This is a question asked to me and I
did
> not know the answer. Thanks
>
> Neil
>
>
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