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To: Allen Benn who wrote (9342)	3/20/2001 1:50:43 PM
From: Pirah Naman	Read Replies (1) \| Respond to of 10309

Allen: Good to see you back. I agree with much of what you wrote here, but a couple of points merit additional comment. Fiscal policy certainly has played a role in the NASDAQ crash, but it likewise played a role in the previous NASDAQ "anti-crash." Instead of material asset inflation, we had financial asset inflation, with the Fed voicing concerns but silently pumping extra money into the system. Because of this, peak to trough (or vice versa) can be misleading. I agree with you that we will see the corrections go too far. Also, while as you say the Clinton administration did not have an adequate energy policy, neither has any previous administration, at least in recent years, and the Bush administration gives every indication of continuing the trend. Maybe politicians and good energy policy don't mix. I'm betting on the 50 basis points as well. - Pirah

To: Allen Benn who wrote (9342)	3/20/2001 4:27:52 PM
From: Uncle Frank	Respond to of 10309

That's an outstanding post, Allen. I hope it gets picked up as a Cool Post so that it gets broad exposure throughout SI. Thanks for taking the time to prepare such a well reasoned argument. uf

To: Allen Benn who wrote (9342)	3/20/2001 9:18:52 PM
From: w2j2	Respond to of 10309

Hurrah! Well said! wj

To: Allen Benn who wrote (9342)	3/20/2001 10:26:05 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 10309

Allen, this is totally off topic and since I am leaving to retrace your recent footsteps tomorrow, I don't even have time to compose an equally long response. However, I am compelled to point out that Greenspan's ego and incompetence cannot be overlooked as the major contributing cause of this mess. In simple terms, his biggest problem was he over manipulated. Through out his tenure, if we had hired the shoe shine boy down the street, who had no idea what the Fed Reserve does, he probably couldn't have done a worse job than Greenspan by just doing nothing. Greenspan's sense of self importance made him mumble jumble to captive audiences all over the world, as if his jaw boning carried any substance. Bottomline: 1) Greenspan sold out to bail out LTCM, lowering interest rate in the face of irrational exuberance. 2) tried to jaw bone down the wealth effect when he could have at least, albeit symbolic, raise margin requirements during the wild internet bubble. 3) creates an atmosphere of confusion, which is exactly contrary to one of the major functions of the Fed Reserve. Maestro was a good book in a sense that it confirmed Greenspan's dictatorial mentalilty, assuming most of Woodward's accounts are factual to some extent. Woodward, unfortunately, appeared to have a relatively shallow understanding of basic economic principles and missed the point in numerous occassions. Now that I got that off my chest, better go pack. Ramsey ps had to rush so please excuse grammatical and spelling errors

To: Allen Benn who wrote (9342)	3/21/2001 1:49:06 PM
From: Snowshoe	Read Replies (1) \| Respond to of 10309

It's Too Late Now By James K. Galbraith Special to TheStreet.com 3/21/01 12:41 PM ET Let me confess to minor sympathy for Brother Greenspan. There was nothing he could have done Tuesday to stop the onrushing slump. The pathetic action he took was merely a shrug, a sigh of resignation and impotence. If you doubt this, ask yourself: Suppose the cut had been 75 basis points? Do you think that would have sparked a rally? Do you really believe that the distance separating a slump from a rally was 25 lousy basis points? Or rather, to be precise, that it was the difference between 25 basis points now and the same 25 basis points in two or three weeks? Of course not. Next, suppose the cuts had been, say, 100 basis points or more. Would the markets have shouted hallelujah then? Would such a cut have jump-started consumer confidence? Would it have revived the tech sector? Or would we have inferred that the news reaching the Fed is worse than we knew? The point is, it's too late. This slump has three deep causes. The first is the build-up of private debts, mainly households, to new highs. The second was the tech bubble, fueled in part by capital inflow, funneled into one narrow sector of the markets. Third, let's be candid, was the last administration's single-minded pursuit of public debt reduction -- a goal achievable in a growing economy only if private debts are going up very fast. The Fed failed to take any steps to control these developments. It failed to discourage excessive household borrowing, particularly unsecured credits. It failed miserably to squelch the Nasdaq bubble, which it could have done on its own authority by raising the margin requirement. It went along with the debt reduction charade -- until just as cravenly switching over to the tax reduction charade last month. And it attacked the debt pile-up at the most vulnerable point in 1999-2000, by jacking up interest rates in what it said -- incredibly -- was a defense against inflation! When households reach historic limits of debt carriage -- and interest rates rise -- they tend to stop borrowing. When a stock bubble pops, the firms feeding on it run out of money after a while. These things have happened. Now, they must run their course. We will need to wait until cars and appliances age, until people have weddings, children, divorces, or deaths in the family, and decide to move to new houses. Only then -- a year or more from now -- will the urge to borrow return. Then, a cut in interest rates might do something. In the meantime, hold on to your hats.

To: Allen Benn who wrote (9342)	3/21/2001 2:51:41 PM
From: chic_hearne	Read Replies (1) \| Respond to of 10309

The U.S. stock markets lost 70% of GDP, probably the largest market loss ever in the U.S. in both absolute and percentage terms. Are you aware that the total market value in 1929 was 70% of GDP? Are you aware that the total market value of Japan in 1989 was 130% of GDP? Are you aware that the total market value in March of 2000 was well over 200% GDP? Now I ask, was the problem tightening too quick and loosening to slow in 99/00? Or was the real problem that this bubble got way too damn big in the first place. I agree Greenspan should get the majority of the blame. I disagree that it was anything he did in 2000 or is doing now. The real problems began in 1995 when the market took off and no one stopped it. JMHO

To: Allen Benn who wrote (9342)	3/21/2001 3:22:02 PM
From: Lee	Read Replies (1) \| Respond to of 10309

"I believe he (Greenspan)is loosening money faster, much faster, than anything implied by the interest rates he controls." Allen, If people are not spending money, or are in fact saving money, placing it in cash, can a loose policy be sufficiently effective? To put it another way, does a drop in the velocity of money offset the benefit of more money? Lee

To: Allen Benn who wrote (9342)	3/21/2001 4:26:04 PM
From: HomeBoy Security	Respond to of 10309

That was the Bomb, Man.

To: Allen Benn who wrote (9342)	3/22/2001 8:36:48 AM
From: RetiredNow	Respond to of 10309

Wow, Allen. All I have to say is that was a gem of a post. I wish all posters thought out their posts as thoroughly.

To: Allen Benn who wrote (9342)	3/22/2001 11:45:32 AM
From: lstrotheid	Respond to of 10309

Great post! I agree with everything you say, especially as relates to "Big Al" seemingly always reactive instead of proactive. Also, I ran across an interesting article in a publication("Investment News") entitled "Greenspan's Other Banking Headache". It seems that Oppenheimer Funds & First Eagle SoGen Funds have filed suit against an international firm located in Switzerland(how convenient) that deals in gold bullion. The crux of the suit is that a buyback program was instituted by the Bank for International Settlements on 72,600 shares at a rate of 50% of value, thereby defrauding 100,000 American holders of the above mentioned funds. And just guess who is on the Board of Directors of the Bank for International Settlements...none other than Mr. Green, as well as William McDonough(President of the NY Fed Reserve Bank)! Now, at the risk of eyeing this with a jaundiced tilt, history shows that as stock prices fall, the price of gold goes up. Could there be more to this monetary policy than Mr. Green is telling us?