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[OM] Politics: No OM content

Subject: [OM] Politics: No OM content
From: Denton Taylor <denton@xxxxxxxx>
Date: Fri, 11 Sep 1998 22:44:37 -0400
>>I hate to disagree with another Zuikoholic, but Allan Greenspan was
appointed as the Chairman of the Fed Reserve Board by President
Reagan, then re-appointed by President Bush.  Slick Billy just
followed along since the economy was doing so great.  Just thought
I'll set the record straight.>>

So therefore he was re-appointed by Clinton. Like a doctor, thy first edict
is Do No Harm. Greenspan is only half the picture. Would a real liberal
pick Wall Streeter Robert Rubin as a cabinet member? Rubin was a Clinton
appointee and was the most instrumental in selling the deficit reduction
act as a serious measure to Wall Street. Since, as ex-chairman of Goldman
Sachs, he had the credibility, long-term interest rates dropped, and the
second leg of the great bull market began. Remember, short-term rates are
controlled by the Fed, but long-term rates are controlled by the market.
The 30-year bond yield has plunged some 500nder Clinton for two reasons:
One, expectations that  inflation will be kept in check by Greenspan & Co.,
and two, that the deficit will be eliminated therefore reducing the
competition for capital with private industry. 

How many people predicted a sub-5% yield and a 9000 Dow when he was
elected? How many would have guessed the US Dollar would be the world's
strongest currency?

Two other points: The economy was most emphatically NOT doing great under
Bush. That's why Clinton won.

Second, if we're going to talk about the Fed, Reagan got credit for
straightening out Carter's mess, yet Paul Volker was appointed by Carter
and re-appointed by Reagan. It was Volker's fiscal tightening under Carter
that resulting in the drastic reduction of inflation--at the price of 21%
long bonds--that partially caused Carter re-election.

Wall Street is generally considered a bastion of conservatism. But it's not
really. While many tarnsh the President with epithets of Slick Willie and
worse, the real fiscal conservatives--the stock and bond traders who bet
billions on the strength of America daily--are solidly behind him. The fact
that Clinton may be forced out scares them, which certainly is partially
(not wholly) responsible for the market's plunge in recent weeks.



Regards,


Denton Taylor
_______________________________
Photogallery at www.dentontaylor.com

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