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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: Wally Mastroly who wrote (11148)1/14/2000 5:18:00 PM
From: Justa Werkenstiff  Read Replies (2) of 15132
 
Wally: You are right on point with respect to Greenspan. He should check the mirror with respect to the wealth effect because, as it turns out, he and the wealth effect are one in the same at this point.

Here he states that he is concerned with about the wealth effect putting a strain on the economy but he fosters additional wealth by doing his soft shoe. Let's face it, that speech was a stump speech. It was not a "technology and the economy" speech but a "business cycle" speech. The market yawned and the only conclusion to be reached was that the rules to the game were still the same.

How many folks went on margin today after that speech? They must have been lined up at the door to play this rally. I guess he was not concerned about the obvious speculation in the market. Oh sure, he say this may all be, in part, a bubble -- but he is a weenie in dealing with the problem. No leadership here from the Greenman. He is following the markets. It is time for him to get of the Washington dinner circuit and check in at a reality treatment center.

Here is the scenario played out three times thus far. Folks get a little concerned in the market about the Greenman. He gives us a quarter of a point of medicine and we feel better and it is off to the races again.

I guess Greenspan figures if he is slow and cautious the market will slowly get the message and flatten out and correct in the face of higher interest rates at some point. You know, an economic slowdown or a higher discount rate being applied to earnings by the market. Whatever. The risk is that the economy has too much momentum for him to handle it in such a fashion.

But we should all thank him for letting us have at least one more day to sell into strength.
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