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To: JDN who wrote (78796)	2/28/2000 7:11:00 AM
From: Elwood P. Dowd	Read Replies (1) \| Respond to of 97611

JDN or anyone know if AV is still scheduled to IPO on 3/6? Last I heard the deal may have been derailed by some 60 year old rule/law. El

To: JDN who wrote (78796)	2/28/2000 8:17:00 AM
From: Windseye	Respond to of 97611

Hi all, back after a 40 day ARK excursion (therapeutic milieu in Penn.)... As my son spoke to me yesterday about these same issues... a VP at his mutual fund firm had presented their thoughts regarding the actual model that AG uses to make interest rate decision. Their contention is that the rates have to keep going up because the money flowing in the high tech bubble can only be indirectly influenced by the interest rates. The internet bubble stocks are indeed printing their own money yet it is the fund managers, the big movers and shakers, that have to be scared about the liklihood of the bubble bursting and moving back into DOW stocks before the interest rate hikes will have their influence. SO it may be that as the long term rates go up, the DOW corporate bonds start to look real good, and then the riskiness of the bubbles becomes too much to take, then the flow goes back into the traditional. BEcause many of the internet bubble stocks DO support substantively ALL economic growth many of themore solid, supportive companies will persist at higher levels of valuation, but the pure flutterbys will go away either by absorbtion of closing doors. Taking this analysis to heart it would be reasonable that we can watch the DOW stocks move into an a lower trading range, and stay there, until the NASDAQ has shaken out the truly frivolous, at which point stock valuations may once again be based on traditional earning evaluations... If this is where AG is heading we probably have a very slow year to put up with... lots of gyrating and playing in narrow trading ranges, until there is a firm foundation in company valuation. Regards, Doug

To: JDN who wrote (78796)	2/28/2000 8:57:00 AM
From: MeDroogies	Respond to of 97611

I agree that AG is only following markets. Remember, though markets aren't "perfect", they are pretty accurate. Rates DO need to be raised, because the easy access to capital has allowed ALOT of marginal firms to remain in business longer than would normally be acceptable. AG has a duty to manage the bubble that currently exists in the market. It may be a bear market (I don't disagree), but you'd never know it to look at most techs. By allowing them to essentially print their own money using stock, AG has to manage money supply elsewhere.....hence rising interest rates. I think his decisions have been what have kept the market moving in the past. I'm sure he has no "hidden agenda" to quash the market...just to keep it level-headed.

To: JDN who wrote (78796)	2/28/2000 1:41:00 PM
From: Loki	Read Replies (1) \| Respond to of 97611

JDN...RE: "...companies to raise capital..." I would think that some of the small businesses, of which you wrote, might find it more difficult to borrow in a higher interest rate environment. I believe I understand the objective that AG has in regards to raising interest rates.....however.... The economy (and market) are extremely dynamic and it can therefore be folly to apply a strategy designed for a static environment, by applying an older strategy. I question whether the economic indicators, from which decisions are made, are still as valid today as much as in the past. (They might again someday ... "reverting to the mean") Your points 1-3 also echo my sentiments. The repatriation of foreign money (rising foreign economies provide alternative investing possibilities) and the reduction of domestic liquidity also add to this situation. Oil prices, due to long term contracts at lower prices, have not had the full affect on the economy, yet. All this leads to the idea that there should be a "wait and see" approach before considering the next rate move. Maybe there is a sentiment that it will become difficult to slow the economy in the second half of 2000 (election year) and therefore, the tone must be set now. ????? Loki