Letters To The Editor
MORE OPTIONS
Great article by Marty Kearney in the June issue (“Going Long with LEAPS”). In what I perceive as a flat or slightly rising market, I have been writing out-of-the-money calls. This has worked out reasonably well for me. I must admit that I’ve had my losses when the underlying stock drops a lot. Please refer me to some sources that describe other more advanced strategies.
——Peter C., Camp Hill, Pa.
GO AWAY GREEN
I don’t subscribe to this magazine to read more about environmentalism [referring to June’s green investing theme] written by the sensitive crusaders who get their “juices” by battling for the “cause.” Send the crusaders to India, China, Philippines, Africa, etc. where extensive environmental destruction is occurring (all done by terrible American companies, of course).
——Paul W. H.
GET REAL PART 2
The Your Turn comment in the June 2008 issue about not being able to find U.S. banks through which one can invest in Brazilian reals indicates that you have not found Everbank based in St. Louis (Everbank.com). It has possibilities of investing in many currencies (of which the real is one), including three- and six-month CDs.
——Stan S., Stamford, Conn.
POWERFUL TONGUE WAGGING
In "Blame Greenspan?" (June edition), David Silverman concentrates on the Fed's manipulation of short-term interest rates and of bank capital requirements.
He omits two other Fed tools (I fault Greenspan for also omitting) when he reaches a conclusion that "when stocks are skyrocketing, there is no guarantee that rising rates will inhibit investment in them." One tool is to increase margin requirements on stock trading accounts and the second is jawboning. Greenspan said the first would be insignificant, and the second he limited to a quip about "excessive exuberance."
But I believe that increasing margin requirements (e.g., in 25 percent increments to 100 percent, as was done successfully a few decades ago), coupled with strong jawboning, would have moderated speculation.
Likewise, there should have been more counteraction against easy low-interest mortgages. It is ironic that when for the first time, the prevalence of adjustable-rate mortgages enabled the Fed to directly tighten the mortgage market, the Fed did the opposite.
——Ronald D., New Rochelle, N.Y.
Your Answers
Should the U.S. government impose greenhouse gas emissions limits on American
companies? Send your answer to editorial@sfomag.com. Check here next month for the
results.
May's poll results: Do you think the U.S. Fed did the right thing
in engineering the buyout of Bear Stearns by JPMorgan Chase?
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