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Technology Stocks : JDS Uniphase (JDSU) -- Ignore unavailable to you. Want to Upgrade?

To: Kent Rattey who wrote (8891)	4/15/2000 1:47:00 PM
From: Hank Stamper	Respond to of 24042

Kent, D.T.: "<I did not use the term "prolonged" so I am not really sure how to answer.>" K.R.: ""prolonged", was interpreted from your words:"" The reason why I made this point (sorry if it seems nit-picky) is that I consider the period from 1974 to 1982 as a "prolonged bear." The long-term trend was pretty flat. Look at the charts and you'll see what I mean. So, when I wrote 'that a typical bear lasts from 6, 24, or even 36 or more months,' I was referring to the common variety and not a "prolonged" bear. My point was to suggest to people, that this bear market (to be sure, putative bear) will not act like the many short-term corrections we've been used to. It will not even act like the intermediate term correction we had in 1998. Many of those corrections took only a few weeks to work out. If this is a real bear market it will take many, many, months to work out and the 'work out' will be grinding and relentless. "Are you saying the expansion is ending, and based on what? ". This is a good question. I will try for a clear answer and one of your comments will help: "AG is trying to put the brakes on a very rapid expansive economy." You are correct that AG is trying to put the brakes on a too-rapid expansion. And I think you have pointed directly to the rub: The Fed is saying that it is slowing the expansion. But, we all need to keep in mind that the Fed doesn't have a good record of putting on the brakes. In the last 40 or so years the Fed has applied the brakes to speeding economies 8 times. What's the score? Tie: 4 to 4! I.e., on 4 occasions, there was a so-called soft landing. On the other 4, we got slammed into the dashboard--i.e., the Fed's tightening 'caused' a recession. Greenspan's speeches are instructive on this very point. He regularly says the tools at his disposal are imprecise and can overshoot the goal--i.e, he acknowledges the Fed can tighten too much and 'cause' a recession. He also says the number one target is inflation and the Fed will accept a recession, if it must. (On a related note, I just visited the S&P site and found that the current p/e for the 500 index is 33. That is still about double the historical average. So, by historical standards, we may be skidding with the brakes on for a long, long way.) With regard, David Todtman