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To: Maurice Winn who wrote (123743)	9/3/2002 7:25:58 AM
From: Jack Bridges	Read Replies (6) \| Respond to of 152472

Maurice, Maybe you can help me to understand why Greenspan did not make any attempt to cool down the manias of the '90s by the simple expediency of tightened margin rules. They worked well in earlier decades and his explanation that investors would use alternate credit sources never rang true to me. As best I can recall now, he argued that mortgage credit in particular could not be controlled by the Fed and that therefore it was no use for the Fed to clamp down directly on broker and bank sources of securities credit. As I see it, higher margin requirements would have acted as an official warning to Wall Street and to the public, thus helping to contain the manias by reducing the fundamental incentive for more and more credit with which to chase stocks. Indeed, real estate could not have run up in tandem, if not fueled by the wealth effect of the spiraling stock market. Further, by NOT raising margin requirements, the Fed sent a false message to the public that all was well in River City. Cheers, Jack