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To: pater tenebrarum who wrote (69480)	10/18/1999 9:05:00 AM
From: Terry Whitman	Read Replies (1) \| Respond to of 86076

The fiendster tells it like it is: > Fiend Commentary ================ Spoiled Rotten Bulls Poor Alan Greenspan. It appears that he is once again in the doghouse as far as the Bulls are concerned. On Thursday night, Alan Greenspan made cautionary comments concerning the stock market which subsequently capped off its worst week by percentage in ten years with a big loss on Friday. Based on what I read over the weekend, it seems like the Bulls are now trying to use Greenspan as a scapegoat for the stock market's recent losses. I'm surprised that I didn't hear an analysts remark: "We would have been up another 20% this year if it wasn't for Alan Greenspan's big mouth." Columns in several major publications (including Investor's Business Daily) criticized Alan Greenspan for having the temerity to speak his mind on the health of the stock market. Almost in unison, they asserted that Alan Greenspan is an expert on the economy but lousy in stock market forecasting. The common theme was that Alan Greenspan is purposely trying to knock the stock market lower and that this is not his responsibility. I like this logic. The stock market is so complicated that only brain dead columnists and TV commentators such as Louis Rukeyser should be left to discern it viability. Alan Greenspan, master of what the Bulls call the greatest economy in human history can't even use his fifty years of experience in financial markets to warn them of the danger he sees ahead. Any comment that Alan Greenspan against the stock market is automatically discounted and discredited. I would be willing to make a large wager that if Alan Greenspan said something supportive of the speculative mania, the Bulls would claim it as vindication for their Pollyanna views. I certainly wouldn't expect to hear: "Alan Greenspan thinks the Dow is going to 15,000 by 2001, but it isn't his job to talk up the stock market." You would more likely hear: "Alan Greenspan, with his fifty years of financial experience, agrees that the Dow is headed higher over the next couple of years." Remember heads, Bulls win, tails, Bears lose. Truth be told, it makes the Bulls very nervous to hear Alan Greenspan slam the stock market. From their viewpoint, it is perfectly acceptable for him to pump up the stock market by providing excessive amounts of liquidity, but it is considered treacherous for him to reduce liquidity. I can't recall a single bubblehead complaining about the Fed's "Christmas in October" last year when interest rates were aggressively cut to bail out the stock market. If Greenspan is not supposed to determine monetary policy based on the action in the stock market, how does one explain 75 basis points worth of interest rates cuts during a period when the U.S. economy was showing no signs of slowing down? Now that we have had a full year for the reckless liquidity to seep into the economy, it should be no surprise to see signs of above trend growth and inflation. I think that Greenspan and the Fed spoiled the Bulls last fall with his Dow-saving interest rate cuts last year. The bad news for the Bulls this time around is that the Federal Reserve can't afford to cut interest rates like they did last year. If anything, with inflation showing signs of life, they are going to be more inclined to raise interest rates. <