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Strategies & Market Trends : MDA - Market Direction Analysis

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Nov 12 4:00 PM EST

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To: Gary Burton who wrote (67872)	1/29/2001 12:44:56 PM
From: Doug	Read Replies (2) of 99985

gary: Hays has been consistently logical regarding the markets. The G.N.P is driven by two important factors. demand of goods and the availability of money. The average consumer is not facing a credit crunch. Banks are awash in cash and are willing to loan with the minimum of security. The unemployment index has been at a record low which shows the Consumer has the resources. The economy is facing a slow down in demand because supply of goods and in particular High tech goods far exceeds demand. Under such conditions , interest rates are ony a fine tuning mechanism. A cut in interest rates is not likely to create the huge demand required to mop up excess capacity. That excess supply has to be liquidated by more traditional ways viz megers, write downs and Chapter 11s. Once supply and demand are closer to equilibrum , interest rates would certainly help. But first we may have to do the clean up that was caused by past excesses.

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