>For the record, I think that what "Bubbles" Greenspan is doing (try to
>slowly rein in his Bubble by choking off the real economy) is idiotic.
>People who think they are going to make 50% a year in the market will not
>be deterred by 8, 9 or 13% interest rates. Productive businesses will.
You're right that the real economy will suffer from higher rates, but a speculative market can't survive them for long either. Unless it really is different this time. Jordan?
PS: If a good deal of real consumption and investment is a byproduct of the bubble - the wealth effect on consumption, the IPO gravy train feeding ad spending and real estate buying, the flow of foreign capital into the U.S. funding general overspending - then the productive/bubble distinction might not be that helpful.