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To: RocketMan who wrote (4545)	2/21/2000 1:39:00 PM
From: stockman_scott	Read Replies (1) \| Respond to of 35685

Rocketman: I tend to agree with you about the market....Investors either need to embrace the digital economy or suffer the consequences (I am fortunate I got my grandfather to sell ALL of his Berkshire Hathaway last year and put it into CMGI -- lets just say that he has been VERY pleased with the results so far <G>...). Economist Larry Kudlow tends to think Greenspan is Misguided....FYI... cnbc.com Here are some key passages, IMO... <<...Stock markets, and their major sector categories, are leading indicators of the future economy. A tough question for policymakers and investors is this: If the old economy slows, will the new economy bail us out? The economic zeitgeist is all with the new Internet economy. Faster growth, more productivity and profits, lower prices. A fabulous story, the lifeline of the long prosperity boom that began over seventeen years ago. However, the new economy's contribution to economic growth, though rising, is still less than one-third. That's a huge contribution, but it still leaves roughly two-thirds to the traditional elements that comprise gross domestic product. Even if the government data fails to accurately capture the real world contributions of the new economy -- perhaps it's fifty percent -- that still leaves a vulnerable half remaining. And, let's not forget, if it be true that technology companies are less interest-sensitive, it does not always follow that their customers are equally immune to rate hikes. Mr. Greenspan's harsh testimony raises the age-old question of whether the Fed can engineer a soft landing. He implied that the central bank prefers real growth in a range of 3.5 percent, a substantial slowdown from the roughly 6-percent growth of the past two quarters. That's a 40-percent growth decline. 40 percent. Not mere fine-tuning, but a very sizable decline in growth. Is this necessary? Does growth really cause inflation? Does the Fed have the tools, or the information, to undertake such a precise and sensitively calibrated surgical incision? My answer is negative on all three counts. For generations central bankers have claimed they are all-powerful. But the results speak for themselves, and they speak poorly. The Fed has always talked about "taking away the punchbowl." At least now, in Mr. Greenspan's fourth term, the Fed may be willing to let the punchbowl fill us a little higher. My problem is that most individuals operating in the free economy know full well when to stop drinking. They don't need the Daddy-state Fed to do it for them. For those that do not know when to stop, they will suffer the consequences. But the whole economy needn't be suppressed; our free-will, self-regulatory, information technology discovery process is a more efficient economic mechanism than government planning. This is why I disagree with Mr. Greenspan's policy statement before Congress. It's an anti-market lurch back to the past, while the whole thrust of our economic miracle is trying to fast-forward into the future.>> ---------------------------------------------------------------------- I remain FULLY invested in the market (primarily in young tech stocks) and I continue to sleep VERY well -- of course I have a LONG time horizon for many of my investments. I actually welcome some volatility in the market -- it creates some excellent buying opportunities...!! Best Regards, Scott