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To: NOW who wrote (28199)	10/13/2000 6:16:00 PM
From: UnBelievable	Respond to of 436258

If You Keep In Mind One Thing Today Is Very Easy To Understand Wall Street (The Investment Banks, Funds, Advisors) are in the business of selling stocks. Just like Ford sell cars (but their cost of goods sold is a lot less). In this economy their product does not have any real economic value related to the ability of the companies whose stock it is to generate profits to the shareholder. The value of their product is totally psychological. Its value is based entirely on the customers believing it has value. When that belief is strong they are able to sell many inexpensive stock certificates for dollars. When that belief falters there product become significantly less valuable. The underlying limitations of our economy are putting stresses on people's ability to utilize their limited resources to buy these certificates. So the price begin to decline. As the price begin to decline the psychological value of owning the stock ( the belief that you will be able to sell it to someone else in the future for more than you paid for it) declines, and again, the price that people are willing to pay for stock declines. Like any business Wall Street has a strong preference for selling its product (stock certificates) for more rather than less. And just like any business they are willing to expend money (marketing expense) to increase the price they are able to charge for their product. In Wall Street's case that marketing consists of public displays that the value of their product remains high. They achieve this in a number of ways most of which are related to buying the stock at a high price. A lot of what occurs is they are actually buying the stock from themselves so the fact that they are paying more than is really necessary does not even cost them anything. To some extent they are even willing to buy the shares from others at a high price, because they know that this cost will be more than offset by the additional shares they are able to sell at that high price once they establish it. I don't think that at this time the Fed is actually directly getting involved in the "pits" but rather is making it very easy for the Wall Street firms to finance their marketing expense. Until the value of a stock is related to some risk adjusted expectation of the present value of the future products of the company, many things may be said to determine stock prices but they really don't. It amazes me that people are will to take the word of the salesman for this business (the so called analysts) at fact value. How many Ford salesman are going to say that a new Ford SUV is not a good investment.