Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: TobagoJack who wrote (5438)	6/30/2001 8:41:35 PM
From: Maurice Winn	Read Replies (1) of 74559

<THE quarter-point cut in interest rates by America’s Federal Reserve on June 27th takes the total reduction in rates over the past six months to 2.75 percentage points> Jay, you cash holders are so lucky! You are paying much, much less tax than at the beginning of the year. There is also a huge reduction in Nasdaq capital gains taxes this year compared with the years to the beginning of Y2K. The Dow is flat [for 2 years now], so there's not much in the way of capital gains there either. Corporate profits are down [generally] so there is a tax cut there too. All the salaries going to dot.coms have gone, so there's no tax payable on those. I suppose some money printing can make up the shortfall so the government still has loot to spend. But it must be annoying to people holding big wads of cash on which they were retired because they pay a lot less tax, but they get a lot less income too. Cash holders had better hope low interest rates don't last too many years. Since interest rates went up in the USA partly to squeeze irrational exuberance from the stock markets and that has been very successful, there seems to be little pressure to increase interest rates any time soon. So, start sweating Jay and hope that the great financial calamity of 2001 happens in the next 6 months since it didn't happen in the first. I prefer steamed to barbecued [less carcinogenic]. Also, please tell me this - why don't Japanese borrow billions of yen at about zero % interest, buy some buildings, rent them out [rents are high in Japan according to my Japanese source] and pay back the loans over the next umpteen years [or just borrow more]? 1% interest is very attractive. That's an actual serious question which puzzles me. Since it isn't happening, there must be a good reason. Or maybe it is happening. Mqurice

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