STOLEN STUFF:
From: JRI Thursday, Dec 14, 2000 6:01 PM ET
Reply # of 38099
If you were Greenie...knowing what you know.....wouldn't you cut rates ONCE now (next Tuesday)?....and then wait and see in January if the data keeps coming a consistent downward slide....and do it again (if the data continues down)..
Core PPI was flat today...if CPI core also benign, I would think Greenie has room here...
Man, when was the last time Msft and all the techs, AND, consumer durables, AND retail all missed estimates...Real estate is going to tank big time in the spring....Greenie has to have blinders not to see a problem here...
But let's say I'm wrong: If (somehow) December unemployment, wages, retail sales remain strong/gain strength....you leave it at one cut....that's not going to provide that much impetus here..that's not going to drive us back above 4+ % annual growth......but waiting even 6 weeks to cut could be deadly if we are going in for a hard landing.....we could go negative growth by Q1..
In my mind, (cut now) is the best "protect my rear" yet not pour too much fuel on the fire strategy for Greenie.....waiting until January to cut may be too late (given the months lag)...Greenie would be dumb to risk recession....given now oil is likely back under control..
If we don't rally into the Fed meeting, I think I'll buy on the odd chance I'm right here.....after all, if the Naz is sitting between 2500-2600 by meeting day, I'd say the "neutral" is priced in...pretty low risk, no?....BTW- I think any rate cut rally will be short, but should be strong.. |
