<HTML>In a message dated 8/13/02 4:49:21 PM Eastern Daylight Time, dhenwood@panix.com writes: <BLOCKQUOTE TYPE=CITE style="BORDER-LEFT: #0000ff 2px solid; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px; PADDING-LEFT: 5px">How? Why? Whaddya mean? </BLOCKQUOTE> It would have been spinned to link to the stock market (since Greenspan characterized the economy as 'resilient' just last month) evoking remarks from Bush & co. about the positive combined impact of harsher corporate fraud penalties (a useless afterthought) and supportive monetary policy. But, the erosion in stock market value over the past two years, and more spectacularly over the past couple months, was due to the discovery that all the balance sheet inflation, growth in R&D and technology, and over-expansion was built on quicksand. The 11 rate cuts over the past year didn't boost the market or the economy, because they couldn't change that basic fact. Cutting in mid August when markets are even more volatile because of the sheer lack of participants - while we're already at 1.75% uses up a bullet. A cut would have boosted the markets for a day, two max! b! efore they crashed even lower. It would have been construed as positive for a few minutes, before the realization set in that there's no room to go much lower. That said, I believe Greenspan will cut rates after another round of economic data and AFTER the FOMC meeting on 9/24 (as has been his controlling custom - he never cuts when everyone's looking.) Nomi</HTML>