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Rational Utterance? Fed Chairman Greenspan Discovers Internet Stocks

Federal Reserve chair Alan Greenspan may have read his first issue of Internet Stock Report or Internet World magazine. Maybe he saw You've Got Mail and signed up for AOL. Or built a Web site at GeoCities, started a free email account at HotMail, dialed into Earthlink.

How about bought a book at Amazon, traded a Beanie Baby on eBay, read a URL on a newspaper masthead or magazine cover, saw a reference to the Web on TV, a bus, billboard?

Perhaps he sat in a movie theater and was bombarded by movie URLs, booked a flight on Preview Travel, downloaded a copy of G2 from RealNetworks, ICQed his family, chatted with fellow economists on AOL, got his stock quotes at Stockpoint, scheduled Fed Reserve meetings via Yahoo calendar, read personalized news from My Excite, bought a car through Microsoft's CarPoint, researched the history of Dow Jones on DowJones.com, listened to a college sports game on Broadcast.com, scanned international finance at FT.com?

Maybe he found a S-1 on the SEC's Edgar, traded stocks on E*TRADE, checked his balance at his bank on the Web, read the Starr Report on Lycos.com, bought a really cool techno-gadget on SharperImage.com, sent an e-card from hallmark.com, got a weather chart at weather.com, acquired a CyberCash wallet, played online bingo at Uproar.com.

And more.

Why Greenspan, why the above? The stalewart money supply czar made comments to the Senate yesterday that sounded very favorable to Internet stocks. Is he suffering from "rational exuberance," to paraphrase his now famous remark last year about the overall market rise.

More importantly, Greenspan for the first time ever said the "I" word in public, "Internet" and completed the thought with the word "stocks," making this a historical utterance that even the money man acknowledges that the Internet is changing business, changing the U.S. economy.

Greenspan's remarks on Internet stocks and valuations came before the Senate where he mentioned that some Internet stocks in general may not be overvalued. Some may be, some may not. Is this the same Alan Greenspan who last year spooked the entire market globally by saying the rise and bubble for the broad market was perhaps a result of "irrational exuberance?"

Or maybe it was Greenspan who left that "chat-cronym" drifting across a strip of fiber running through PSINet, IMHO.