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To: LLCF who wrote (11112)	3/2/2001 4:54:04 PM
From: pbull	Read Replies (3) \| Respond to of 13572

Excellent article. Thanks. Yes, it chronicles what it describes as the "Goldilocks" period, then presents likely trends over the next several years in the wake of that. It's not 1929. It's not Japan. But I don't think the average person, much less the average congressman, understands why the Fed can't just lower short-term rates and get us out of this. In fact, lower rates would be counterproductive in some ways IF it encouraged continued excesses in private debt (debt of telco firms near the top of the list), which is the area that appears to me to be most vulnerable, and certainly unsustainable. The implications are profound for makers of 'Net infrastructure equipment (and, by extension, their suppliers). Why am I harping on this? Because there are too many idiots telling people to invest in "next generation" companies, whose stocks have been savaged, because they'll be the leaders in the next bull run. I say, that's bull, because telco debt is ANOTHER bubble that almost certainly will burst, and the authorities will have to deal with the ramifications of that. How big is the telco debt bubble? As I understand it, about the same size as the S&L fiasco of the late 1980s. Optics, photonics, all this stuff is great technology, but the cash flow created doesn't justify the investment. Video on demand isn't the killer ap, in other words. Neither is e-commerce, as we've learned recently. Look at ARBA. So where do we go from here? The "adjustment" in the economy will have to run its course, as Mr. Greenspan testified. You can lower interest rates, raise rates, leave them the same, cut taxes, raise taxes, leave them the same and it all just doesn't make much difference at this point in time. All IMO. Thanks again. PB