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To: ali who wrote (21650)	10/14/1998 6:12:00 PM
From: Sergio R. Mejia	Respond to of 116779

From Kaplan's page today: "Please show me the way to the next whisky bar." --Kurt Weill Although popular myth has it that 401Ks were the culprit, in fact, baby boomers' parents were primarily responsible for the stock market euphoria of 1995-1998 by transferring their steady, conservative, life-long asset accumulation from safe investments such as bank CDs, GICs, and money market funds into aggressive growth stocks of all categories. (Presumably they didn't resolve their midlife crises as well as they should have.) Thus thoroughly stinking drunk on speculative excess, as a teetotaler would be after a night of bar hopping, these "investors" (a.k.a. gamblers), growing tired of the stale party at the S&P500 bar and grill (the Russell 2000 crowd finished their spiked punch concoction some time ago), are hitting the streets, looking for the most raucous crowd around. The gold crowd is just getting started, without anyone going near the heavy stuff so far, and with a lot of party poopers grumbling that the gold party just isn't responding the way it used to in the good old days. Given enough time, the yellow metal folks will really get rockin', and hordes of people will be banging down the doors to get in. For a drunk, switching watering holes is a whole lot easier than getting sober.

To: ali who wrote (21650)	10/14/1998 8:32:00 PM
From: E. Charters	Read Replies (1) \| Respond to of 116779

No. People who owe very large debt should be allowed to pay it off at last partially rather than closed down. But of course the lesson should be learned. This is irresponsible on the behalf of banks to get into speculation on that order as it does not generate wealth directly. If the reserve policy were changed then banks would not be able to loan such fabulous sums as they go against any normal rate of wealth creation which cannot exceed infrastructure building and third world advancement rates. These real rates are very satisfactorily entertained at abpout 3% growth rate. Poland can entertain 6% growth as it is rebounding from artificial suppression of its economy for years and has the basis to rebuild its infrastructure quickly with nearby markets and political stability. The 3rd world could grow quickly of it were not religiously, tribally and politically hobbled resulting in poor social, econmic, and educational fabric and instability. This is not seen to be a likelihood for the next little while as they have to evolve past feudal mind sets and dictatorial policies that are fraught with errors in economic and development policy as in Korea. IE: revolution beats starvation. Obviously a fund that hopes to create wealth from derivatives trading on a large asset base cannot exceed sector real growth for very long. And its risk is huge at economic cusp points, or market highs. How do we know they are highs? The P/E ratios of the stocks that lead the market. Simple stuff. Barring a new technology change or massive foreign investment returns the continued growth in large scale economic sense that would drive a market is not there. EC<:-}