MKT-
I only referred to LTCM as an example of the ends that the Fed will go to in propping up finanacial institutions (any financial institutions!). Even ones that informed people have never heard of. The big problem, of course is that-- very much like the problem of huge selling that they face in their stock market levitation act--if enough financial institutions go bad at the same time, things will spiral out of control. (BY the way, if anyone does not think that the hand of the Fed is giving us a manufactured market at this point, study the chart of the INDU carefully, and then show me one other period of six months when the market behaved similarly. Markets simply do not move in straight lines, unless they are being manipulated!)
Judging by Greenspans outrageous remarks at Jackson Hole--about making it up as he goes along and "trust me" and all the rest--I am less inclined to believe strongly that the Fed will be able to manage every crisis. Too much hubris there. "Pride goeth before the fall" & c.
schloss
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