U.S. News and World Report May 14, 2001 Letters Bear market facts What initially contributed to the market's decline was the sharp increase in puts, calls, shorts, margin debt, and day trading by March of 2000 ["What Kind of Bear?" March 26]. The result was the equity valuations fluctuated wildly and prices shot up well beyond their normal price-earnings ratios. This extreme volatility did not bode well for companies and brokerages that would rather have seen a steady increase in equity prices for investors. What is needed is a third captial-gains-tax rate of 60 percent for equities held less than two weeks. This tax on short-term holdings would significantly reduce day trading and margin debt since few investors would be willing to take the risk of daytrading and pay a 60 percent capital-gains tax on their profits. Stability would return to the markets, fewer investors would lose their shirts, and companies would have a good idea of their valuations each day. John M. Lemandri Washington, D.C. This was a letter to the editor to U.S. News and World Report. What is this guy talking about? He makes it sound like the April 2000 crash was caused by day-trading. What do you guys think of this?