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Technology Stocks : Compaq
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To: Night Writer who wrote (78762)2/26/2000 8:19:00 PM
From: Loki  Read Replies (3) of 97611
 
Night Writer...RE:"You would think the oil price increase would take enough money out of circulation to cool the GDP and Fed off."

This is an excellent point. Consider also that the full
effect of the oil increase has not been felt yet due to
some long term price contracts. (some 1-2 years)

If part of Greenspan's objective is to cool down the
narrow number of stocks (with high valuations)...why is
a method (tightening interest rates) being used that
first effects that part of the broader market which
has been in a bear market for some time?

The high flyers in technology print their own money
(stock) and do not need to borrow. Technology will
continue to be purchased to drive efficiency in the
corporations. So higher interest rates have less
effect.

Greenspan talks about a "new economy" (market).
Why does he believe that traditional methods will
work?.....and why is he so set against tightening the
margin requirements which might focus more directly on
the speculative investments?

"Wealth Effect"?.....What is AG's definition of this?
In theory,....possibly?
In reality,...what is the aggregate reality?
Can all investors realize these gains at once?...no!...
What would happen to the market?...

(Certainly, for CPQ investors "Wealth Effect" is a
foreign concept)

AG is a smart guy. This time I am somewhat at a loss
to understand his strategy.

Loki
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