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To: pater tenebrarum who wrote (67673)	2/14/2001 3:19:16 PM
From: prosperous	Read Replies (2) \| Respond to of 436258

I think AG is well aware of that part, IMO he is quite smart. I think what he is trying to control is that investor sentiment not go too negative: -he has created less uncertain atmosphere about rates and has obliged with the mass expectations -he got very nervous when consumer confidence dropped heavily. I think he is doing this because, he does not want the excesses to happen on down side with a very poor investor sentiment (as they happened on the upside). My suspicion is that if he were to privately tell over a beer about his assessment of where the whole thing stands, he might admit that he expects the equities to see a further downside and a reasonable expectation is to see S&P 500 down to about a 1000 level by Oct_Dec 2001-March 2002 frame, and then sideways consolidation for about a year from there. If that could be managed gradually, without investor sentiment going too negative (by always holding a carrot in front of them about recovery into the future) that might be a soft landing scenario because S&P 500, which many hold in their retirement accounts, will be down from the peak by about 35% (which is reasonable correction for a bubble_bursted market), the long termers will continue to hold (those are the folks that AG probably does not want to get nervous and panic and drive it to 650). In another 2 years, the earnings can catch up to that scenario and we could head up from there. What happens to NASDAQ in the mean while? who knows, I don't think Fed probably cares less about the speculators who want to lose lock, stock, and barrel. SO I would expect a gradual grind of Dow and S&P 500 over an year, then a consolidation for another year as a reasonable scenario if AG is successful at controlling the investor sentiment on the down side, that will probably save the other country's economies from going further down and IMO is a desirable scenario. The question is will it take the excesses of the bubble out from the system? I think it can, because the Nasdaq is the wild card and presumably it can be allowed to go down significantly without bleeding the long term investors (I don't call a 35% correction bleeding, it is part of the normal game). The S&P chart also is pointing to this scenario. 2 years of back to back negative returns and a year of consolidation could adequately squeeze excesses out and wear out the speculators. Just some idle musings....