Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Raymond Duray who wrote (15240)	2/20/2002 1:56:16 AM
From: Moominoid	Read Replies (1) of 74559

Interest Rates? Really, who knew they could actually be important after Japan's experience. I think you have to dig a little deeper. I think you have to ask yourself, in the cold hard light of day, why is it that when short rates in the U.S. crashed from 6.5 to 1.75, the market said nyet. Without the cut to 1.75 the NAS would already be at 500 <ng> Japan is in a depression.... and interest rates can't be cut further. My scenario for the US is rising interest rates - these will directly impact stocks through domestic investors choices and the impact on the economy down the road and also they will cause foreign investors to pull their money out in a self-accelerating decline as the USD goes down (interest rates are working in the opposite direction on the FOREX market than in the standard macro textbook treatment). Then the Fed will get into a second round of panic cutting down to the magic zero number as the NAS dives under 1000, Dow below 7000 etc. etc.... All IMHO of course. David

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