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I agree Joe, no one can know it all. I am by no means any type of expert in
the economy, but I think there is some validity in what James says. I just
hope that it all falls out somewhere in the middle and doesn't crash as hard
as James thinks. Here is a site that is quite interesting:
http://www.publicdebt.treas.gov/opd/opdpenny.htm
It is the US federal govenments official site that posts the public debt to
the penny every day. You can search back many years if you want. When you
have a look, think about how many times you have heard the word "surplus"
used by all the politicians over the last year.
John
In a message dated 11/29/00 7:18:41 AM Central Standard Time,
joeduffy@xxxxxxxxx writes:
> One of the greatest gifts you can have in the market is "knowing what you
> don't know". No one knows all there is to know about being a Fed Chairman,
> including Greenspan, because such is impossible.
> One of the things I have observed though, is that people who state their
> opinions beginning with the statement "the fact is", are among those who
> don't know what they don't know. And as such, they most often turn out to
be
> dead wrong.
>
>
> ----- Original Message -----
> From: James Taylor <jptaylor@xxxxxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxx>
> Sent: Tuesday, November 28, 2000 11:43 PM
> Subject: Re: Re: [RT] Alan Greenspan
>
>
> > 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
> >
> >
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