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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club

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To: Justa Werkenstiff who wrote (5353)5/25/1999 4:28:00 PM
From: Justa Werkenstiff  Read Replies (2) of 15132
 
Well, the probabilities that the Fed. will tighten anytime soon have materially decreased IMO. USA Today reports that emerging market credit spreads have widened once again. The emerging markets are contracting again in the equity and credit departments and since this was the primary reason why the Fed. eased rates last fall, the probability that the Fed. will tighten is materially less in the face of this situation.

Watch the small caps in our market. That is where the credit crunch caused liquidity fears which , in turn, caused the small caps to tank.

And with each day the correction proceeds, the probability that Brinker will see a bear market also decreases.

The worst thing we could have is some inflation data uptick. The Fed. then would be in a very tough position.

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