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To: fedhead who wrote (103538)	5/17/2000 6:28:00 PM
From: GST	Respond to of 164684

Anindo: No question, higher rates hit the average person when it comes time to shop. This idea that high tech is not hit by rate hikes, however, deserves a lot closer examination. High tech is fueled by easy money -- lots and lots of it. Rate hikes are about drying up the excessive supply of easy money -- money made available to get us through some dangerous economic conditions, but money that is now threatening the balance of the economy. Rates are going higher - the question is how high. Today I bet on a slight easy of concerns with the jobless claims in the morning. But make no mistake, we are in a bear market for techs and a meltdown for the pure play "new economy" stocks -- IMO.

To: fedhead who wrote (103538)	5/17/2000 7:56:00 PM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

The high tech workers who are the prime beneficiaries of the dot com mania will not be affected other than lowering the value of their options. The working poor are going to be adversely affected. I think Greenspan should wait and see the effects of the present hikes before hiking anymore. Anindo, I would go as far as to say this last 50 basis points was too much. The "working poor" have already reduced the amount they are willing to place on their credit cards due increased interest charges. I believe but cannot prove the economy has slowed more than the Fed apparently believes. It is just taking time to show. This is only going increase the gap betweent the working poor and the beneficiaries of the dot com mania. Glenn