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To: LKO who wrote (52545)	8/25/2002 4:59:19 PM
From: paul_philp	Read Replies (2) \| Respond to of 54805

Geez, Gretchen Morgenson as an antidote for Paul Krugman. They occupy the same moral ivory tower but only one of them is smart. Morgenson is a finger pointer of the worst kind but she does serve a useful purpose. She digs up stuff that less cynical people would otherwise miss. However, a fine analytic mind she is not. The Internet bubble was an event of massive proportions. The idea that it could have been orchistrated, let alone caused, by human design grossly over estimates the power of human beings to control events in complex social systems. This does not mean that some people did not take advantage of the bubble in ways that propogated it. This is how bubbles work - the collective actions of individual agents - but it is important to put the cart in front of the horse. Paul

To: LKO who wrote (52545)	8/25/2002 6:46:47 PM
From: hueyone	Respond to of 54805

Another possibility is that the corruption may have been one of the factors causing* the bubble.* I believe a significant factor contributing to the bubble and its massive misallocation of capital were many companies' misrepresentative, though legal, pro forma earnings reports---though this is not to suggest that all pro forma earnings reporting is bogus or not useful. In addition, failure to expense stock options on quarterly reports on both a pro forma and GAAP basis, which is all perfectly legal, was another major contributing factor in my humble opinion. Best, Huey