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To: GST who wrote (109923)	10/8/2000 11:39:37 PM
From: Glenn D. Rudolph	Respond to of 164684

thestreet.com "After the Gold Rush By Todd Harrison 10/8/00 10:10 AM ET With the hope that this piece causes the absolute bottom of U.S equity prices, I'll pen the thesis for the bears, and hope for all our sakes that I'm dead wrong. The irony of the bear case is that it began with the very vehicle that minted fortunes for the masses. The Internet was so revolutionary that there were no discernable metrics by which to value the companies that changed the world. What became evident through time was that the information superhighway was the most disinflationary instrument ever to be unleashed on humankind. This product removes pricing power from virtually every sector of the economy and inevitably crushes corporate margins as consumers are afforded the luxury of choice. Of course, this is nothing new, but the effect has taken a few years to permeate the reality of consequence. As time passed and complacency and greed became fixtures of expectation, the obscene returns of the stock market enriched the masses and emboldened them to purchase more stock at higher levels. The chief difference between now and years gone by is that virtually everyone is tied to the market today, fearful of being left behind. The inherent risk in a decline has never been more universally pervasive. There's an actual level at which the creation of wealth turns into the depletion of wealth, and those who have leveraged their lifestyles to the market will feel the pressure. As productivity gains elongated the peak of the business cycle, expectations for growth and the sustainability of stock prices trumped the historians. Traditionalists who urged caution became targets of ridicule, and professionals who relied on historical metrics were squeezed out of our collective mindset. The "new paradigm" had arrived. Why is it different now? Well, for one, we're further along the cycle and many of the instruments of wealth accumulation have fallen hard. Companies that financed the dream are finding out that gravity does indeed exist in valuation. Unfortunately, they're learning this lesson through their balance sheets and credit risk. There are companies out there, blue-chip companies, that bit at the golden apple and are now chewing on a mouthful of seeds. As the dot-com and Clec valuations evaporate, there's invariably a domino effect that will reverberate through the financial system. With the current macro environment further pressuring corporate margins, the question that remains is: What is the impetus for stocks to bounce, other than trading rallies? Multinationals are experiencing the double whammy of higher oil prices and a faltering euro, and balance sheets are stretched thin. " I recommend reading the rest.