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To: Maurice Winn who wrote (123284)	8/17/2002 12:38:35 AM
From: Wyätt Gwyön	Respond to of 152472

Maurice, i doubt i will change your opinion on greenspan so i'm not going to waste a lot of time trying (edit: i actually did waste a lot of time, so hopefully it's not a complete waste). i will simply point out that the criticism has nothing to do with your Zombie idea. the problems with a bubble are much larger in scope than what happened to so and so's stock portfolio (which seems your sole area of focus with this Zombie stuff). the main problem is that, during the course of a bubble, the cost of capital becomes very cheap relative to the expected return on capital. this is by necessity a temporary condition (since new cos will take advantage of the cheap capital by entering the market, thereby eventually driving down the return on equity for incumbents to the point where cost and return are again in equilibrium). the real-world effect is that capacity is greatly increased beyond what normalized demand can support. in addition to the capacity overhang, there is a debt overhang. these are structural issues for the economy as a whole that take many years to work out. just look at Japan--still in the doldrums more than a decade after their bubble peaked. that is because their system developed too much capacity, and became addicted to cheap capital which could not provide sufficient returns. this weakens the entire financial system and you end up with a big mess on your hands. the stories of individual zombies seem to have caught your attention, but those are just sad bit players in a greater tragedy that will play out across the entire economy over many years to come. simply put, there isn't much greenspan can do now that the bubble has popped. it's just that he shouldn't have aided and abetted its growth in the first place. so that's about all i have to say about Mr. KBE. i will leave the more serious diatribing to others. if you really like to read the serious diatribes, why don't you get the latest Grant's (www.grantspub.com) and also just read Fleckenstein for a few weeks (he's at thestreet.com now). while i think greenspan is an idiot, i don't have anything personal against him like some bears seem to have. maybe that's because i personally benefitted from our ridiculous bubble, while the shorts got their heads handed to them on the way up. i think another reason is, if it weren't greenspan, it probably would've been some other bozo. obviously, there's a Zeitgeist element to it. while i think of greenspan as an "aider and abettor" of the bubble, he certainly didn't do it all by himself. we all, or most of us, were participants in one way or another. so i can understand why you don't like zombies who should take responsibility for their own actions. but i think you need to recognize that the aftermath of the bubble has consequences for all of us, whether we are going to retire on Alpo or caviar.

To: Maurice Winn who wrote (123284)	8/18/2002 9:34:44 AM
From: Jon Koplik	Read Replies (1) \| Respond to of 152472

Re : "Anyone could have shorted the market if they thought it was too high." Ever heard of a "buy in" ? Often, just when the going gets good for short sellers, securities firms find that they cannot borrow sufficient shares to lend to short sellers, and a (further) exponential rise in the already over-priced security then begins. (Same thing also for short sellers of specific issues of bonds; including corporates, municipals, and US Treasuries). Ever heard of the fact that the shares of an IPO typically cannot be sold short for at least a month after the date of the IPO (guaranteeing that no one can help adjust the supply / demand equilibrium to a reasonable level) ? I absolutely wanted to sell short Palm (PALM) (as in Palm Pilot) on the first day it was "out." It could not be done. (For a "retail" investor like me, anyway ...) Ever hear of organized short squeezes in commodity futures contracts that are not "cash settlement" ? I remember at least four. Brent Crude Oil (twice). Orange Juice in 1986. Silver in 1979 - 1980. (And, maybe Warren Buffett's vain attempt to do it again a few years ago). Guess what is the only thing I've ever seen where one does not have to think about short selling being at ANY kind of a disadvantage ? 91-day Eurodollar CD futures. Cash settlement. HUGE open interest. Anyone who loses money as a short seller in Eurodollar futures actually lost money in a "fair" game ... Jon.