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To: Mary Cluney who wrote (143979)	9/23/2001 11:15:50 PM
From: tcmay	Respond to of 186894

"The Japanese economic model didn't work in Japan as the Japanese consumers batten down the hatches and their econmy went into decline." The Japanese system is different from the American system in many ways. The problems they are now going through are caused by much, much more than doing what is happening in America _now_ (a temporary battening down of the hatches). If you think the Japanese experience proves something about what should be done in the next few months, I have no interest in disabusing you of this notion. "Economics is as much about psychology as it is about anything else. Confident people invest in the future and get as much pleasure living in the the present as possible." Psychobabble sloganeering. "The economic bubble that we lived under had to burst as we did not have the fundamentals to support that vision. The pendulum swung too far in that direction. But, now the pendulum is swinging in the opposite direction. That much is clear. " What evidence do you have that the pendulum is swinging in the opposite direction? It may be, but what evidence do you offer? "The dotcom bubble burst, interest rates were raised to cool down the economy, the telecom industry over built, the investment community threw too much good money after bad projects, and sensible people started to talk the economy down - all that created a logical result as before the markets opened September 11, 2001 the economy was heading toward recession. " And 911 pushed it over the edge into recession. Given an economy going deeper into recession, tech stocks are likely to get hit even harder. Which is why I challenged the "buy stocks on Monday morning as a patriotic gesture!" nonsense. "There were only a few insiders that knew what was going to happen." I doubt _anyone_ knew what was going to happen. _Some_ turned out to have forecast correctly, but this does not mean their forecasts were due to knowledge. (If anyone wonders how this can be, someone bets on "17" at the casino and wins...doesn't mean they knew 17 would come up.) "But, I doubt the planners of the attack on the World Trade Center had a clue what the consequences were going to be. I don't give them that much credit. They were not rocket scientists. They were relatively low tech thugs. They didn't even have to learn how to take off or land a modern aircraft. But, I'm not taking any solace in that - I just don't want to give them any credit for intelligence. They were basically very stupid people." It's silly and dangerous to dismiss them as "basically very stupid people." "Nevertheless, the consequences are brutal. Nothing is going to be the same again. This was an epoch event. I cried and cried each time I heard stories about firefighters, victims on that flight that crashed in Pennsylvania, and all the other stories about ordinary people. The travel, tourist, and entertainment industries are immediately effected and collateral industries will be hurt. Worse, terrible people will start to think about doing terrible deeds that was once not even considered. There is a snowball effect." Indeed, precisely why a week ago today I said people should avoid the b.s. about buying for patriotic reasons, and that airlines would be devastated. (They were, and those who bought for patriotic reasons were suckers.) "Talking down the economy, talking down life, are cheap shots. Any fool can do it - and most fools will. They will hunker down and live miserable lives. " You seem to both believe things will get worse (snowball effects, copycat attacks, deteriorating economy, etc.) and also that admitting this and making investment decisions based on this is "foolish." On the contrary, using information is what investment is about. Selling American Airlines and buying General Dynamics won't change what happened on 911. It may even save lives, for the usual reasons. This is how markets work. --Tim May