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Technology Stocks : WDC/Sandisk Corporation
WDC 179.56+0.7%Dec 24 12:59 PM EST
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To: limtex who wrote (19084)2/12/2001 2:14:50 PM
From: Robert Douglas   of 60323
 
It was Mr G again at that time who increased interest rates in 0.5% increments
which in a sort space of time brought the market to the brink of collapse.

Let's see, the Fed funds rate was over 11% in 1984 and by autumn 1986 it was 6%, having begun the year around 8 1/2%. By the fateful October a year later, the funds rate had risen to the extraordinary rate of 7%.

And how did this precipitate the crash of that year? Why did a rise from 6% to 7% cause a financial panic when rates much higher than that hadn't during 84,85 and most of 86? And why was the market able to make a substantial recovery the following years with a funds rate above that which supposedly triggered the crisis?
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