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Strategies & Market Trends : Currencies and the Global Capital Markets
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To: Robert Douglas who wrote (3120)7/20/2001 1:46:53 PM
From: Ahda   of 3536
 
I'm having a difficult time deciding whether or not the Fed's easings will have much of a stimulative effect on the economy. What do you think?

I am not seeing it in people i talk to the problems are still there increased debt on the corporate level still needs consumer consumption.

As I see it, there aren't many areas where lower rates will help that aren't already doing well, e.g. housing, consumer spending, autos.

All of these could be do to high debt good for growth but you need added employment, corporate growth, to have the housing market continue as well as consumer spending. The housing figures i think will soon begin to show weakness throughout CA which because of sales here will for a bit enhance figures elsewhere.

So in total, I don't see much demand added to the economy from lower rates, especially since two of the avenues of stimulus that lower rates usually bring, lower dollar and lower long-term rates, didn't happen this time.

There ease too many dollars covering that that could of happened. The happenings in my opinion have become totally tied to elsewhere.

I feel we aren't going to be seeing rounded growth. There might be spotty pockets within the banking industry as some will find binds within China, and new investment growth but due to the cost factor here I feel we are looking very mature on growth and carry a huge risk of continuing to lower the rates and our credit worthiness in the process.
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