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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: Les H who wrote (71549)2/25/2001 2:28:03 PM
From: UnBelievable  Read Replies (2) of 436258
 
Through A Glass Darkly - A Rate Cut Rally

Friday's afternoon rally, based on the speculation of a Bear Stearns’s Analyst that there was a 60% chance of an interim rate cut raises a number of issues.
But leaving aside questions like is there any reason for the market to rally if there is an interim rate cut, what I question is the appropriateness and legality of their making such a statement.

This statement constitutes a blatant attempt to manipulate the market and is a flagrant example of a statement that was made solely for the purpose of artificially raising stock prices. It therefore is a clear violation of SEC laws.

The Federal Reserve has made public information concerning their perspective on the economy, and circumstances under which they would cut interest rates. It is very illegal for them to disclose to any private interest information that it has not disclosed publicly.

So the question is on what basis did Bear Stearns make their prognostication? It would seem that either they were privy to illegal inside information, or it is pure speculation on their part and is not based on the type of factual information which security analysts are required to use when expressing an opinion concerning a stock or the direction of the market.

Besides, the answer is no more than 50 basis points. If we get .50 cents now we would not get anything at the next meeting. More likely we get .25 next and perhaps another .25 at the next meeting.
Greenspan may be doing all he can to re-inflate the bubble but even he recognizes that radical changes in interest rates in an extremely short period of time have greater potential to burst it than inflate it.

And how do they know it is 60% rather than 50% or 70%. Did they press an opinion in such statistical precision when if fact they had no basis for doing so?
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