Traders under 25K
- Thread starter Mr_F
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If Greenspan had done his job and hiked margin requirements, the perceived 'need' for the PDT would never have arisen.
Here is an excerpt from this weekend's Barron's:
Yet, as we've tried to intimate (well, maybe a little more emphatically than intimate), Mr. Greenspan failed to discourage the stock-market mania while discouragement was still possible and, if anything, fed the flames. But, in truth, his lapse was all the worse, because in contrast to his public pretense that he couldn't discern a bubble, early on in private he admitted to its existence. And further owned up to the potency of higher margins as a means of puncturing it.
This revelation comes to us through the agency of Stephen Roach, chief economist for Morgan Stanley. Steve's simply top-notch. He's extraordinarily smart, really knows his stuff, is a truly rare bird who thinks for himself and, even rarer perhaps, can clearly articulate in the mother tongue what he thinks. He's not always right (after all, he's an economist, not a journalist), but he always makes eminent sense.
Back in late February, in a piece aptly entitled "Smoking Gun," Steve described rooting through the transcripts of Fed policy meetings held in 1996. What he discovered, in his words, is that "Chairman Greenspan and his colleagues were not only very disturbed about the rapidly emerging equity bubble, but they were also quite conversant in what it would take to pop it."
At the Sept. 24, 1996, gathering of the Fed's Open Market Committee, Steve quotes Mr. Greenspan: "I recognize there is a stock-market bubble problem at this point." (The Dow, incidentally, Steve notes, was 5874 on that date, roughly half the peak it eventually bubbled up to in early 2000.)
And Mr. Greenspan evinced no doubt about what could deflate that bubble. To wit: "We do have the possibility of raising major concerns by increasing margin requirements. I guarantee that if you want to get rid of the bubble, whatever it is, that will do it."
However, Steve relates, the Fed, in effect, decided to "sit on the sidelines as mere observers of the Great American Asset Bubble." Says Steve: The reluctance to make such a "surgical strike" reflects Greenspan's concern about "what else it [raising margin requirements] will do."
So, instead, Mr. G decided to "keep an eye on" the bubble. And as Steve relates at least as much in sorrow as anger, aside from cautioning about irrational exuberance and one timid nudge to rates in March '97, eyeballing was the extent of the Fed's anti-bubble exertions.
Greenspan is clearly a political animal. He has shown this by saying whatever is in line with the political winds blowing at the time. He is not interested with his responsability to the average hard working US citizen, nor how the future will remember him. The only thing that motivates him is how much he can ingratiate himself with the prevailing powers in Washington at that moment in time. That is how he has lasted so long and that is how he has conitnued to ruin the economy.
Here is an excerpt from this weekend's Barron's:
Yet, as we've tried to intimate (well, maybe a little more emphatically than intimate), Mr. Greenspan failed to discourage the stock-market mania while discouragement was still possible and, if anything, fed the flames. But, in truth, his lapse was all the worse, because in contrast to his public pretense that he couldn't discern a bubble, early on in private he admitted to its existence. And further owned up to the potency of higher margins as a means of puncturing it.
This revelation comes to us through the agency of Stephen Roach, chief economist for Morgan Stanley. Steve's simply top-notch. He's extraordinarily smart, really knows his stuff, is a truly rare bird who thinks for himself and, even rarer perhaps, can clearly articulate in the mother tongue what he thinks. He's not always right (after all, he's an economist, not a journalist), but he always makes eminent sense.
Back in late February, in a piece aptly entitled "Smoking Gun," Steve described rooting through the transcripts of Fed policy meetings held in 1996. What he discovered, in his words, is that "Chairman Greenspan and his colleagues were not only very disturbed about the rapidly emerging equity bubble, but they were also quite conversant in what it would take to pop it."
At the Sept. 24, 1996, gathering of the Fed's Open Market Committee, Steve quotes Mr. Greenspan: "I recognize there is a stock-market bubble problem at this point." (The Dow, incidentally, Steve notes, was 5874 on that date, roughly half the peak it eventually bubbled up to in early 2000.)
And Mr. Greenspan evinced no doubt about what could deflate that bubble. To wit: "We do have the possibility of raising major concerns by increasing margin requirements. I guarantee that if you want to get rid of the bubble, whatever it is, that will do it."
However, Steve relates, the Fed, in effect, decided to "sit on the sidelines as mere observers of the Great American Asset Bubble." Says Steve: The reluctance to make such a "surgical strike" reflects Greenspan's concern about "what else it [raising margin requirements] will do."
So, instead, Mr. G decided to "keep an eye on" the bubble. And as Steve relates at least as much in sorrow as anger, aside from cautioning about irrational exuberance and one timid nudge to rates in March '97, eyeballing was the extent of the Fed's anti-bubble exertions.
Greenspan is clearly a political animal. He has shown this by saying whatever is in line with the political winds blowing at the time. He is not interested with his responsability to the average hard working US citizen, nor how the future will remember him. The only thing that motivates him is how much he can ingratiate himself with the prevailing powers in Washington at that moment in time. That is how he has lasted so long and that is how he has conitnued to ruin the economy.
Someone mentioned that ETF's are exempt from the PDT rule. Is this true?
heh -- I play dumpers too. Right now I'm in PME @ .27 and .30, bb stock QNTI @ .31 and averaging down low .20s if i can, and SOS @ 1.25.
I'm the only person in the world, that I know of, who plays these pieces of crap as his primary strategy. But I am consistently successful at it, and it's more fun than more expensive stocks. Once I get above $25K, I'll have to go legit though.
Bottoms are easier to call at $1 and below. When bigger stocks dump on bad news, they'll continue to fall just as often as they bounce. Short interest and balance sheet do help predict, but price action and volume are the the key.
Aaron
I'm the only person in the world, that I know of, who plays these pieces of crap as his primary strategy. But I am consistently successful at it, and it's more fun than more expensive stocks. Once I get above $25K, I'll have to go legit though.
Bottoms are easier to call at $1 and below. When bigger stocks dump on bad news, they'll continue to fall just as often as they bounce. Short interest and balance sheet do help predict, but price action and volume are the the key.
Aaron
specul8tor
Guest
now that this rule in in play how am I gonna make money?
specul8tor
Guest
i really need to take the amateurs money! the pros keep taking mine.......this is why its soo hard to trade
I disagree. I think the daytraders were hurting the specialists and market makers pockets. Classic example of big money protecting itself and benefiting from new law to the detriment of small money. These guys are like spiders building a web in a corner so that prey from all directions are funneled into their web. They are firmly entrenched in the system and will continually promote new law that solidifies their positions.
Aura-
thanks for giving me props on that quote, but to be honest, I stole that from someone else.
One thing I will mention is this weeks BusinessWeeks cover. Big picture of a bear. Typically a short-term bottoming signal, except this issue seems different....here's the headline and caption:
"THE ANGRY MARKET. Investors are repricing stocks to reflect a more honest picture of ernings, option, and the future. Ultimately, That's Good" Still seems a bit too optimistic.
Gotta love this game. Gotta love the volatility.