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To: Big time Mona who wrote (18315)	5/25/1999 8:17:00 AM
From: James Fulop	Read Replies (2) \| Respond to of 41369

Not so fast..... I just got this off the news wire .... <g> (and this should also make the existing home sales data today interesting....) From Bridge News.. "Repeating from late Monday-- --Greenspan:US consumption driven by "very sharp" stock mkt rise --Greenspan: Wealth effect not only tied to stock market --US Greenspan: Capital gains not always linked to stock mkt By Anne Maitrepierre, Bridge News Washington--May 24--Federal Reserve Board Chairman Alan Greenspan said today that home sales remain a "critical factor" in evaluating the direction of the US retail sector. In a speech accepting a public service award from the National Retail Federation, Greenspan said that "irrespective of the market, and of the various different equities, it is terribly important to keep an eye on existing home sales," and not only on income and debt patterns which have been the "traditional factors" used in evaluating the health of the retail sector. While recognizing that "the very sharp rise in stock prices" has been a "major force" in the rise of US consumption, Greenspan also attributed the wealth effect to the importance of capital gains. "While stock prices can go up or down, the degree to which capital gains on ... home sales ... is not necessarily the same pattern as in the stock market," Greenspan said, adding that "the wealth effect is not wholly the consequence of the stock market." Capital gains on the sale of the home can be translated into "real money for real purchases," Greenspan explained, adding that has "a real impact on consumption." In turn, he said, the rise in cap ital gains have had "a very profound effect on retail markets" in the US. Then asked by the audience to comment on Fed Y2K readiness, Greenspan said that while he did have "some concerns" in the middle of last year, he isn't concerned any more about the ability of the US banking system to handle the millennium change and any potential computer glitches associated with it. As far as banks' computer systems having "very substantial success" in anticipating any Y2K related problems, Greenspan said that "they are ahead of the curve." On the other hand, Greenspan continued, "what is not yet being overcome is the extent to which people are becoming concerned about something awful happening on Jan 1, 2000." Greenspan said that his concern was more about people being out on the streets with too much cash, adding that people ought to not make too many rash bank cash withdrawals "Leave it (money) in the bank, it's the safest place to be," Greenspan said." Tel: (202) 662-7108 Send comments to Internet address: econ@bridge.com