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To: Les H who wrote (29454)	11/29/2001 11:11:07 AM
From: Les H	Read Replies (1) \| Respond to of 29970

More on @home situation siliconvalley.com

To: Les H who wrote (29454)	11/29/2001 6:00:10 PM
From: FR1	Respond to of 29970

I think the economy was out of kilter, well before they reached 6.5% Of course there were major "out of kilter" companies. The advance/decline ratio fell off a cliff with people stuffing tons of money into stocks like RNWK who had a PE of 3,500 at one time. If you believe in a market economy those things sort themselves out fairly quickly. Unfortunately, the professors at the FED believe that only a government managed economy could possibly work (managed by them, of course). The FED felt it was their duty intervene and "bring the market back to its senses". Look at a internet poster child like AMZN. Before the FED raised their rates over 6% AMZN went through the whole cycle. They came out as a story stock, went up 1200% in a year and then people sold them down when the path to profitability did not materialize. The same would have happened with all the other story stocks if left alone. But when the FED stepped in and choked the economy to death they killed tons of businesses that never should have been damaged (like the entire telcom industry). Unfortunately you kill all the competition by intervening and you consolidate the big businesses. Now we have to start from scratch with the added problem of having really monster businesses owning most of the market. The only good thing is that they can kill the market but they can not kill the desire for expanded internet traffic so there will be a recovery.