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To: Perspective who wrote (66680)	2/11/2001 9:07:38 AM
From: flatsville	Read Replies (3) \| Respond to of 436258

I am waiting for the article where someone tries to explain what happened in the fall of 1999 and the spring of 2000 by looking at interest rates and liquidity...actual liquidity...not just assuming that a rise in interest rates during that period stifled liquidity. Greenspan, in his zeal to head off the inflation threat and to unofficially suck some of the air from the stock market bubble, went on a rate-raising spree that spiked up the cost of borrowing money by 175 basis points in six gouges. The rate hikes, which were excessive, choked the economy and sent stocks on a downward spiral, with the Nasdaq Composite Index crashing 39.3 percent last year. We know the above is a load of crap. It wasn't the continued tightening that caused the Naz to "crash" 39.9%. Try this for an explanation-- stls.frb.org What's been happening for the past few years is that the Fed has added to the market's volatility with its stated bias either toward tightening or loosening the nation's money string. The central bank's threat to rein in inflation two years ago by boosting interest rates was just as disruptive to the stock market as its current effort to administer smelling salts to the wheezy economy by chopping away at interest rates. Too many have looked at the puppet master's action on the interest rate string. Few have looked at his manipulation of the liquidity string. They haven't come to grips with the idea that rising interest rates does not truly equate to a "tight money" policy. When are they ever gonna figure this out?