FED NOV 2003 "SHOULD THE FED REACT TO THE STOCK MARKET?"

Conclusion

"The deficit now exceeds 5% of GDP, implying that the U.S. economy must draw in about $1.5 billion per day from foreign investors to finance domestic spending."2003 *(now it is 10% and we need over $3BILLION a day! 365 days a year, but actually our deficit has reached $1.5 T to be financed)

"Although central banks control only short-term interest rates, their ability to influence longer-term rates and other asset prices is part of the transmission mechanism of monetary policy.(REALLY?) Movements in asset prices can have important consequences for real output and inflation.(NO INFLATION? ASK EGYPT,BRAZIL,INDIA,MEXICO,CHINA..or Amrican consumers.) Still, economists do not agree on whether central banks should react directly to asset prices(BUT THEY DID TARGET THE STOCK MARKET!), or, more specifically, whether central banks should take steps to prevent or deflate asset price bubbles. The arguments against doing so emphasize issues pertaining to difficulty and risk, but there are strong counterarguments that favor action when faced with a suspected bubble."

Kevin J. Lansing

* SO let's see what we have, a market driven by liquidity furnished bythe FED with a 0% FED funds rate. We have banks and wall street firms, hedge funds more leveraged than ever before and LONG. FED policies have fostered the stock market recovery but it has done litte to help the avg Joe......our inflated $'s are reaching all over the world and igniting inflation, here only if you kick out life sustaining FOOD AND ENERGY do you have low inflation...and we also get BOGUS MISLEADING GOV'T DATA....mostly BS!

We had a debt crisis, we have cured it by adding even more debt? WE have another record for those recieving food stamps.....where is the recovery for those needing govt assistance?

Stocks are moving on momentum and there is no other game in town, as the us $ continues to peter out, and the housing market has FAR to go before we can call recovery, especially as it is still losing value...its nice to know that the rule from the GAO to suspend standard accounting of loses is still in effect so we can show higher SPX profits than otherwise would be possible.

I think the recovery is a farse, that isn't stopping stocks from rising, I don't like their undepinnings, I said new highs are possible.....but take note of what I say, when this runs out fo steam, there is nothing left to prop it up. You cannot engineer prosperity by printing money...only delay retribution

D