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To: Berney who wrote (31935)	8/30/1999 8:22:00 AM
From: Chip McVickar	Respond to of 44573

Berney, Greenspan is worried about the balance sheets of America's businesses, financials and corporate and households as well. The question remains whether this is a bubble {based on old evaluations} or the evolution of old economic thinking to accommodate a "NEW" capacity {through technological advances} within the old theories? If one has read all of Greenspan's "messages" over the last 3 years this particular speech falls in line as a continuation of his internal struggles about "The New Thinking" and reflects his own confrontation with the worlds monetary system, the USofA and our personal use of credit. Last year at this time was not a pleasant period for Alan Greenspan! Nor was the LTCM fiasco! He's worried again as our aging world central banker looks into the future. >>"However, the violence of the responses to what seemed to be relatively mild imbalances in Southeast Asia in 1997 and throughout the global economy in August and September of 1998 has illustrated yet again that the adjustments in asset markets can be discontinuous, especially when investors hold highly leveraged positions and when views about long-term equilibria are not firmly held."<< >>"We can readily describe this process, but, to date, economists have been unable to anticipate sharp reversals in confidence. Collapsing confidence is generally described as a bursting bubble, an event incontrovertibly evident only in retrospect. To anticipate a bubble about to burst requires the forecast of a plunge in the prices of assets previously set by the judgments of millions of investors, many of whom are highly knowledgeable about the prospects for the specific companies that make up our broad stock price indexes."<< I believe he's in his last term and leaving his readers a warning! Chip