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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Crystal ball who wrote (38425)	4/9/2001 10:25:10 PM
From: Rob S.	Read Replies (1) \| Respond to of 50167

The thing to remember about the "market" is that a lot of the big run up in the NASDAQ and to a lesser degree in other indexes was caused by all the new companies that have been added in recent years. A large proportion of recent companies added to the NASDAQ were paper companies with diminutive sales relative to their market caps and little or no earnings and in most cases large losses. The market had grown lavishly speculative. Idiotically speculative. Greenspan didn't stick his hand into people’s pockets, smoothly pick out their wallets and pilfer their cash and account numbers. Greenspan didn't float public companies with a false promise that they had well concocted business plans. Tight credit wasn't responsible for large companies such as Cisco, Lucent, Nortel and others to loan equipment to every Internet startup that had a cool name. The "problem" was irrational exuberance and that few analysts or investors foresaw. The only thing significantly wrong with the economy is that the bubble has burst. While not pleasant, this will pas and true value will come out. Cisco, NT and every other tech company will be valued based on their long term sustained sales and earnings. Greenspan was guilty of lowering interest rates too aggressively several years ago and then not loosening up sooner after they were tightened. Those things did not make or keep investors from losing their heads. Don't give Greespan credit for the wild explosion in stocks a couple years ago and don't make him the scape-goat for the crash today. The crash was due to foolish investors and the self serving Wall Street promotion machine.