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Non-Tech : Invest / LTD

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To: The Ox who wrote (12542)	3/20/2000 2:00:00 PM
From: SJS	Read Replies (1) of 14427

Mike, I think he's got this one tomorrow, and at least 2 more. He's determined to slow money growth. I for one don't think it's daytraders and other active traders who created this "wealth" effect. I think the "investing" wealth effect comes from the following: 1) Housing appreciation: If homeowners have unlocked this appreciation by re-financing at the recent very low mortgage rates (and taking out money in addition to this re-finance), then that creates tremendous new wealth. In fact, many have taken wealth from their homes and invested it in technology stocks or funds. Tremendous positive reversals of fortunes for many homeowners!! 2) Stock options: There are quite a few people investing in ESOPs, and other qualified and non-qualified incentive option plans. Many people are sitting on vested (& many have the same unvested options...) thousands, 10's of thousands, or larger of shares of their company stock as incentives to stay. The creates TREMENDOUS NEW WEALTH and consumer buying power. The only way to slow money growth like this is to NOT raise rates to dampen EVERYTHING (and induce a recession....) but to continue to raise margin requirements. Make it mostly a cash market, which reduces the money "multiplier" Steve

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