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To: Carl R. who wrote (1489)	9/12/1998 3:39:00 PM
From: Sam	Read Replies (1) \| Respond to of 3069

Carl, Your point about margin in 1929 is certainly well taken. But Greenspan didn't label the market as suffering from from "irrational exuberance". His comment was framed as a question that ran something like, "How can we tell when a market is suffering from irrational exuberance rather than sound fundamentals?" That isn't an exact quote, but it was more like that than it was a label. It was widely misinterpreted at the time, and still is. Also, as I recall, the market was around 6400 or 6500 at the time. But even that is irrelevant; interest rates are much lower now than they were then. Of course, if we are indeed entering a deflationary period, rates will get still lower, much lower, and it won't help the market much. The cause of this deflation won't be so much a restrictive money supply, but blind overbuilding in developing countries, especially in Asia, without regard to return on equity, profit, or, in short, economic reality. We shall see.

To: Carl R. who wrote (1489)	9/12/1998 3:52:00 PM
From: Zeev Hed	Read Replies (1) \| Respond to of 3069

Carl, the differences between now and 1929, in the US are actually even greater, aggregate demand collapsed a condition which the "safety net" of today is supposed to avoid. I must say, however, that in many of the countries affected, there is no such safety nets, and thus these countries could go into depression like sate, which will bring strong deflationary pressures. To the extent that these deflationary pressures percolate into our economy and translate to just a mild deflationary environment, profit margins may be squeezed and even a local recession could ensue. I do not see that happening right now, but it is not outside the realm of "possible". Zeev PS, I am still waiting for our own seven days moving average BTB ratio to drop under 1 before I feel like giving an "all clear" signal (VBG). Zeev

To: Carl R. who wrote (1489)	9/12/1998 4:18:00 PM
From: Alan Hume	Read Replies (1) \| Respond to of 3069

Hi Carl, I see few parallels to 1929. Free trade is the order of the day, and we are no longer on the gold standard. Europe has become a large (and perhaps incummberant?) industrial block, but nevertheless stable. Asia is a relatively new factor, and is still "learning by doing" as we all have done. Russia and S. America have never figured seriously in the accounts (excepting of course banks and governments who have given and or guaranteed loans, of which history shows us many...) I spoke on Friday with an old friend of mine (CEO of a publicly traded company) in Singapore, and could not resist asking him what had happened to the SIMEX, which in the past 12 months has slid from 2000 to 800 (Symptomatic of many Asian exchanges). "We have been living beyond ur means for too long, and reality has caught up with us" was the immediate reply. I am a Brit living in Germany for nearly 30 years, so was very familiar with this pre Thatcher scenario which Europe also went through. We live in volatile times, but have the advantage of having experience behind us and mechanisms in place to protect us from the likes of 1929 and to a lesser extent 1987. I am very skeptical about the influence of the "Asian problem": Sure Asia represents xx% of the sales of many companies and this sector is being hit due to lack of buying power etc. On the other hand, there is hardly a company in the Hi Tech field who is not manufacturing to varying extent or purchasing in Asia, and hence benefiting from the exchange rates. The Bears of course slant the information to suit their own purposes. Sure it is a problem, but the question is, how much weight does one attach to it? Just like Clinton's lapses with Monica. OK, whatever happened was between 2 consenting adults, and it was only human nature to try to cover it up. But the bottom line is that Bill has, by far and away, the best economic record of any other post war US president. I see strong parallels here with Nixon. In place of Nixon you got Gerald Ford I recall. Hardly a name which will go down in history. Regards Alan