Piffer OT - And Other Assorted Nuts Message Board

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Strategies & Market Trends : Piffer OT - And Other Assorted Nuts

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To: Doppler who wrote (34796)	5/19/2000 11:23:00 PM
From: The Phoenix	Read Replies (1) of 63513

Uh... what imbalances? They say we're spending more than we saving. Based on old measures. They say we're holding too much debt... but what constitutes debt - margin..more importantly given the rise in home values - how much is mortgage debt? Raising rates will not eliminate mortgage debt for those that have fixed rate mortgages. It could cause defaults for those with adjustables. Oh, that's good for the economy...right? Let me see. Greenspan at his last increase suggested he would raise again. If you're in the market for a home do you wait or buy now? Well, of course you buy now if you think you're going to get a better rate - and regardless of the fact that credit markets are dialed in already, uninformed folks believe they'll get better rates today. So the raise in rates to cool the economy with rate hike innuendo seems to be counterproductive. When housing numbers come in - they'll be up. Greenspan will look and say --- see!! We need to raise again! DUH! Of course, you pulled in demand! Sheesh!. Back to margin debt - it's already declining just due to the market. I'm not sure we want to see the market at 2500 because then we'll have a fusion reaction and we'll be unable to stop it. OK... so I'm all for soft landings but once the economy turns (and sentiment with it) it's a tough thing to turn around. Look, we've had 6 hikes and it's just begining to move the ship. What will be the effect if we overshoot... 6 rate cuts? That'll look good to the world banking community... "Hey, what have they got over there in the US - a bunch of clowns running the fed. What is this a friggin Yo-Yo." No, I say let the rate cuts work - continue to make vigilant statements and see what happens. If the market takes off again then move - but right now I believe waiting to see what happens is a safer move and an easier to correct move than overshooting. Just an opinion from someone that misses the bull-run. OG

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