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Technology Stocks : Broadcom (BRCM)
BRCM 54.670.0%Feb 9 4:00 PM EST
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To: Keith A Walker who wrote (3647)3/9/2000 10:37:00 PM
From: Brian Malloy  Read Replies (3) of 6531
 
Greenspan could try that, I have been thinking about that as well. However, the economy is already slowing down. A 50 basis point rate hike would have nothing to do with the economy and everything to do with the NAZ/markets.

I say this; if Greenspan were to tack on 50 basis points the DOW and NAZ would fall on the news. However, the NAZ would rally within two trading days. Now the DOW is already a sick puppy and Greenspan's rate hike would only hurt it more. Greenspan would only help in killing off the "old economy" so to speak and could he even justify further rate hikes? The NAZ continues to motor and people are laughing at the chairman.

Greenspan's current words and rate hikes in my opinion are responsible for the huge divergence between the major indicies. Now we all know from econ 101 that fed rate hikes come with a time lag. Six to 18 months. So, Mr G. can continue to raise rates willy nilly if he wishes...he can even push the economy into a recession if he so chooses.
He can even cause the recession to hit on the doorstep of the presidential election or shortly there-after. But Mr G. is a rational man, he will not do that.

Mr. Greenspan will just have to sit down with a bag of his favorite peanuts and learn a few more lessons about the changing economy while raising rates 1/4 point if at all.

IMHO
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