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To: Glenn D. Rudolph who wrote (80703)	10/15/1999 12:25:00 AM
From: Bilow	Read Replies (1) \| Respond to of 164684

Hi Glenn D. Rudolph; I see the Greenspan comments as possibly directed to the banks that have gotten hurt on the gold carry trade. In other words, he is alluding to events of the recent past, not the immediate future. And, like you say, he has talked about equity valuations before. What he is implying is that the same thing that happened to the miners that hedged themselves in gold could happen to those who rely on hedges in the other financial markets. That is, the market can move too quickly to allow the hedges to be kept balanced. The miners that got in trouble have actually locked in profits going well into the future, they just have a momentary liquidity squeeze, plus the cost of borrowing gold has gone up. Same thing can happen in other markets. What amazes me is that he would state anything even mildly bearish on the day that the long bond drops to a 2 year low. I guess he had that speech written some time ago, maybe when the Nasdaq set new records. By the way, OROA has had some interesting action recently. I tried to get it at 7 1/16, but it ran away from me without looking back. Now it is returning. -- Carl

To: Glenn D. Rudolph who wrote (80703)	10/15/1999 12:30:00 AM
From: GST	Read Replies (1) \| Respond to of 164684

Banks have concerns about spreads -- yes he was addressing banks -- agreed. And he did it by talking about risk, premiums, and human behavior i.e. bubbles and panics. He addressed the issue of technology and profits and bubbles and the way the market prices investments whose payoff is way out in the future (net stocks) which he described as most vulnerable to panic because these are the things that go so quickly from extreme over-valuation to being worthless -- do you honestly think he was talking solely about banks?