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Strategies & Market Trends : MDA - Market Direction Analysis

SPY 695.16

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Jan 12 4:00 PM EST

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To: KevinMark who wrote (64479)	12/17/2000 3:18:39 PM
From: Gary Burton	Read Replies (3) of 99985

Kevin--My2c is that in truth Bush does NOT want a rate cut before he takes up office in January...He DOES want to make it appear to the public that he wants one now since his agenda is to convince people that he is compassionate and cares about people in general. So, he is doing what many politicians do-say one thing and think another. He will remember well what happened to his father when the economy started to weaken close to when he was pushing for re-election. W will want to put himself in a position to blame in 01/02 virtually everything on Clinton's regime and a recession in 01 due to Greenspan waiting too long would be just what the doctor ordered from W's point of view. Why on earth would he want to take the risk of keeping the already long in the tooth economic engine going so that it can start to really sputter in say 03 going into 04? That's what happened to his dad and W will do everything in his power to ensure that it doesn't happen to him. The man would also have to be a complete political fool to have his nemisis Mr G to upstage his taking office by cutting rates before he even started work and thereby again taking the credit in steering the economic back up again into 02 and beyond. And he likely also knows that if G cuts rates now like Wall Street wants, the mo-mo crowd will goose the Naz up yet again and the bubble may well re-expand---which will make it doubly difficult to diffuse next time around....He is meeting G on Monday for public relations purposes-privately hoping that Greenspan doesn't really lower rates on Tuesday. For Mr G's part, if he was a mite reluctant to cut rates on Tuesday, he will become doubly reluctant to cut rates 1 day after he meets W, a man he likely dismisses as a silver spoon lightweight and nowhere near the stature to even be in the same room as Mr G--in Mr. G's mind.----the more W tries to jawbone him, the more G is going to resist.

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