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Strategies & Market Trends : Stock Attack -- A Complete Analysis

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To: Secret_Agent_Man who wrote (38281)12/18/2000 9:58:02 AM
From: Paul Shread  Read Replies (2) of 42787
 
If stock options and gains have kept wage demands to a minimum in recent years, there's going to be more pressure for wage increases in the months ahead. Inflation often shows up as the economy slows down, and the risk appears to be there this time. The Fed's in a real pickle trying to balance stock market irrational exuberance against wage pressures. A tough balancing act. The worst-case scenario is we get both a recession and wage inflation next year.

There was an article in the Washington Post over the weekend that Sillicon Valley types were still pretty hopeful for a recovery in techs and the entrepreneurial/VC mania. Gave me chills reading it. Sounded like it was 1930 and everyone was cheering the market's recovery. To bring it back to the Fed, a lack of accommodation on the part of the Fed led to that bubble bursting a little harder than necessary. Another dilema for the Fed here.
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