From Charles Plank's 7/31 Newsletter: GREENSPAN’S FINANCIAL PROGROM !!! GREENSPAN FIDDLES , WHILE BOND HOLDERS BURN @ THE STAKE!!! POGROM --- the dictionary definition is ---- “An organized massacre of helpless people .” In Alan’s case , we will define it in order to differentiate between financial distress / oppression from an actual massacre involving the loss of life --- as --- “ An organized planning activity to cause great financial distress / oppression with resultant wealth reduction to very large masses of helpless and innocent investors “ 1. Fixed income persons , such as seniors and retired folks , depending previously based on higher interest rate earnings to provide them with their livelihood are now having to dip into their principle . Sir Alan has forced savers to buy bonds and now thanks to Alan have taken huge , huge losses . Or , if they have bought T-Bills , then they earn hardly anything . The Fed’s scorched earth low interest policy has forced seniors and other fixed income folks to spend their hard earned rainy day nest egg savings ; and if they bought bonds , have now lost their shirt in devalued bonds , since mid-June ’03 . 2. In March – April ’03 the Fed inferred they would be buying 30 year T-Bonds . Big , Big Bets were made based on the assumption of Alan’s good faith --- and bought and bought bonds . Such new buying resulted in a new bull up thrust --- until mid-June 2003 . Sir Alan’s apparent strong desire to re-ignite inflationary pressures in order to fight deflation spooked the herd of bond holders . Then , to add insult to injury , he down played hopes the Fed would be buyers of long dated Treasuries . With those actions , Sir Alan betrayed the bond holders . He torched them in a bonfire of Hell . Look at the charts of the 30 year bond and the 10 year notes , since mid-June ’03 . Alan torched the bond holders with a financial flame thrower . These type of folks have now cumulatively lost Trillions and Trillions of $$$ , because they believed the Financial 666 . >>> interest rate yields have gone up like a Golden Erection . Yields since its low of 3.11 % on 13 June on the 10 year note has now risen 133 basis points , or an eye popping 42.8 % . That is a big move in a short time for stocks ; however , for bonds , it is a lifetime of movement packed in a relative split second . It is the fastest sell off crash since the spring of 1987 , which coincidentally was the first Greenspan interest rate experiment that failed miserably , when he became Chairman in 1987 . Atta Boy , Alan . Does not seem like he has improved much , after 16 years on the job . It is just an incredible blood bath financial massacre as to what is going on in the bond market . RIP !!! This action does not bode well for the housing refinancing market nor for the consumer confidence , which has been underpinning the economy . Higher interest rates are going to affect stocks --- in the not too distant future . He has wiped out the wealth of many of these bond holders . The bond yield rise will keep going until they completely offset the Fed’s stimulative policies ; or until they get the Fed to blink --- and consider tightening interest rates . *** It should be noted in passing that neither of those above outcomes would be particularly pleasant for stocks . 3. The only group that is benefiting from Sir Alan’s financial pogrom policies are the Wall St. Hucksters and favored stock investors , so far . 4. Sir Alan’s financial pogrom has initiated the wipe out of wealth destruction of : · seniors , fixed income folks ; and , · bond holders . That makes it two strikes outs against Sir Alan . 5. The remaining group --- stock river boat gamblers and investors --- have now made huge , huge multi – Trillion $$$ bets that stocks outlook will be great in the second half of 2003 . The stock advance has been based on rose colored financial outlook . If those perceptions should start to be proven to be wrong , then , stocks will behave similar to the bond behavior of post June ’03 --- straight down . Such is the definition of a Crash . *** If a stock crash occurs , due to the Sir Alan miscalculations and his not being able to have a firm hold at the helm of the financial Ship of State , he will , and rightly so , be responsible for Crashing the Ship of State (SOS) smack into the reefs . Not only great harm will be done to the domestic economy --- but also to the global economies .
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