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To: IceShark who wrote (7042)	7/28/2000 10:03:37 PM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

Greanjeans, 1994: Greenspan, March 4, 1994 Federal Open Market Committee meeting: "When we moved on February 4th, I think our expectation was that we would prick the bubble in the equity markets. What in fact occurred is that, as evidence of the dramatic shift in the economic outlook began to emerge after we moved and long-term rates began to move up, we were also clearly getting a major upward increase in expectations of corporate earnings. While the stock market went down after our actions on February 4th, it has gone down really quite marginally on net over this period. So what has occurred is that while this capital gains bubble in all financial assets had to come down, instead of the decline being concentrated in the stock area, it shifted over into the bond area. But the effects are the same. These are major capital losses, which have required very dramatic changes in the actions and activities on the part of individuals and institutions."

To: IceShark who wrote (7042)	7/28/2000 10:06:08 PM
From: pater tenebrarum	Respond to of 436258

and an informed(imho) comment on this from kitco: Six years ago, he thought a ) the stock market was a "bubble". Two years after that, he gave his irrational exuberance speech. Now that the stock markets are more than 250% of the 1994 bubble level, logic informs me that either 1 ) he now figures he was wrong in 1994 and 1996 or 2 ) we are in a much more extreme bubble now and he's afraid to say anything. Just like Galbraith said in his book The Great Crash 1929, everyone in the Fed knew it was a dangerous bubble but no one wanted to be the one to take the blame for popping it. So I agree with you. I take his silence to mean the thing is so out of hand and so dangerous that he's afraid he'll get strung up by the gonads for saying or doing anything to set off the eventual panic. Of course, he's going to get strung up by the gonads anyway. Wall Street used him to create the bubble and they're going to use him to take it down, and take the blame, too. And soon. -EJ