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I have underestimated the markets reaction to the sub-prime catastrophe, but Host overestimates what it impact will be. I still hold the belief that most of what we are experiencing is an over-reaction but that reaction is real. The impacts outside of "sub-prime" is mostly on the margins, the underlying economy is strong. Currently the Federal Reserve is injecting liquidity into the market, many would argue that the Fed should have taken more aggressive action sooner, including lowering the discount rate. Two weeks ago, the Fed official position was to fight inflation and their concern over the economy growing too fast.
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"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."
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