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Technology Stocks : WDC/Sandisk Corporation
WDC 158.52-4.6%10:47 AM EST
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To: herringbone_100 who wrote (17677)12/27/2000 12:25:23 AM
From: slacker711  Read Replies (2) of 60323
 
and then let it 'poof' without warning (most don't watch the market's daily gyrations and couldn't see the writing on the wall) except for a garbled 'irrational exuberance' speech last year.

The Fed gave ample warning time for those who were willing to listen. Greenspan's comment about "irrational exuberance" was made when the Dow was around 6000. He then went on to talk about asset inflation for at least a year. Investors even had a chance to exit AFTER the FED began raising rates....people didnt listen because the NAZ kept going up. Simply put...they were blinded by greed. Many investors knew they were gambling. Note the use of gambling terms like "parley" when people talk about turning $10,000 into $100,000 through IPO's.

For those who dont believe that Greenspan should have targeted asset prices....I am curious when you think the NAZ would have been overvalued. If it had hit 10,000 do you think that would have been ok? At some point, a dot-com collapse would have endangered the institutions (banks, hedge funds, mutual funds). If your neighbor down the street goes belly-up because he invested in dot-coms, you feel bad....if your neighbor's bank goes down, many would panic.

It is this type of situation which Greenspan wanted to avoid.

Slacker
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