Semi-Equips - Buy when BLOOD is running in the streets! Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Semi-Equips - Buy when BLOOD is running in the streets!

LRCX 160.52

-4.9%

Dec 12 9:30 AM EST

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: willcousa who wrote (9346)	1/20/2001 11:39:37 AM
From: WTSherman	Read Replies (1) of 10921

<Two things would be very helpful - a larger rate decline than a 1/2 point and a fairly quick and broad tax cut. < I think that the Fed is in something of a box, here. Dropping interest rates too rapidly would show signs of panic on the part of the Fed and seriously destabilize foreign exchange rates. A tax cut, depending upon what it is, is also tricky. Unemployment is still around 4%. I think it can be expected to rise to 4.5% within 3 months. This is still very low and poses a serious threat to the overall inflation picture. The Fed is going to be walking a tightrope and needs Bush to cooperate on taxes. The one thing Greenspan doesn't want is too rapid a reinflation of consumer demand. A nice steady increase working in concert with rate cuts is ideal, since it will allow increased investment in productivity enhancement to match increased demand. However, if what you have is a rapid increase in consumer demand, before, increased investment in productivity it could trigger unemployment moving below 4%, heavy wage pressure and inflation pressure. This will force the Fed to curtail rate cuts and thwart investment that's needed for true growth. It's all very complicated and hard to predict. Far from a science. I think that the most productive tax cuts would be in capital gains, which would have less impact on consumer spending(short term) and more impact on investment. Beyond that the Congress needs to be very careful that it doesn't fall into the old Democratic Party trap of trying to prime a pump that's already got water in it. The history of tax cut priming is that its too late and usually has the opposite effect desired(because its too late). We'll see.... I think that the unemployment rate will dictate how far the Fed can/will go in reducing rates.

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next