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To: Glenn D. Rudolph who wrote (87166)	12/12/1999 3:45:00 PM
From: GST	Read Replies (2) \| Respond to of 164685

Glenn: If I may butt-in, I think the reason that money supply becomes an issue is that we have seen AG 'tapping' on the brakes with his left foot and putting pedal to the metal with his right foot. This is not consistent with 'slowing down the economy'. If it is Y2K related, the metaphor might be 'picking up speed to jump the river' like from some old B movie. What happens on the other side of the river is not clear. Serious slowing down might be required. If the stock market is going along for the ride now, it could also suffer once AG hits the brakes hard on the other side of the river. And soft landings don't always go along with jumping rivers anyway. Now, to be fair, we have not fully explored the extent to which this money supply could be off-setting departures of Japanese money -- which, judging by the yen, has been a major factor in our markets since June. If the Japanese have been selling dollars (remember, we have seen yen go UP by 20% since June), then AG could just be filling in the holes left by the Japanese when they chose to drain their bank accounts. Either way, the sharp increase in stock prices looks a little more shakey to the extent that it is merely reflecting a surge in dollars looking for a home.

To: Glenn D. Rudolph who wrote (87166)	12/12/1999 6:21:00 PM
From: Eric Wells	Read Replies (2) \| Respond to of 164685

I thought the point was this was what was driving the market. Glenn - if you go back and read my original posts on this topic (and you may not wish to do so, as it seems we are beating this topic to death), I originally posted to question William's claim that the Fed was not really expanding the money supply that what the Fed was doing would not impact the economy (William called the move "techical"). Whether the money the Fed has infused into the economy is responsible for the run-up we've seen in the Nasdaq over the past two months - I think a good case can be made that the extra money has contributed to the run-up. But I think enhanced investor euphoria has also helped to boost the market - euphoria due to (1) the market not crashing in October, and (2) optimistic investor expectations for e-tail revenue from the Christmas season. -Eric