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To: jmac who wrote (86168)	7/26/1999 10:36:00 PM
From: Fred Fahmy	Read Replies (1) \| Respond to of 186894

jmac, <Alan doesn't have to raise rates. All he has to do is talk them up and he works the same magic. > Exactly!....and he knows this very well. He knows that he has absolutely no justification for increasing rates again so he tries and succeeds in talking the markets down. Fortunately, if history is any indication, these AG induced corrections end up being nothing more than a buying opportunity. To be quite honest, IMO, the Naz was probably starting to get ahead of itself anyway. The problem with AG's tactics is that when he talks down the market, everything goes down including those stocks which are NOT fundamentally overvalued. When people panic like we have been seeing over the last week....they tend to throw the baby out with the bath water. The last rate increase was questionable. In the absence of any new data, a second rate increase would be unconscionable and a much bigger threat to the economy then any invisible inflationary pressures. AG knows this. Overall, I don't think AG has done a bad job. In fact, I think his actions have been relatively well balanced. It's amazing how much flack he gets from both the bears and bulls. The bears accuse him of single handedly creating an artificial bull market that won't quit. The bulls accuse him of trying to stop it. Overall, I think he has managed to garner ill will from all sides. I think he has a very tough balancing act....and I do think he worries too much about the stock market levels...but I would rather have him try and talk them down occasionally then to do something irresponsible like raise or lower rates when he knows the balance of data suggests no action. FF