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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who started this subject	6/25/2003 1:07:23 PM
From: energyplay	Read Replies (1) of 74559

What Would Be Better Than Another Cut By James J. Cramer 06/25/2003 11:50 AM EDT Click here for more stories by James J. Cramer The dilemma facing the Federal Reserve would be truly humorous if it weren't so darned dark because of its futility. Take today. We got a monstrously good new home sales number -- too good, by my take, because housing is still surging. But we have a horrid durable goods order because no matter what the Fed does, it can't create demand for most of the stuff that goes into the durable goods away from washers and dryers. So what does it do? It cuts rates even lower to make housing surge on, even while the rest of the economy yawns. This is precisely the reason I have been saying that a cut is absurd and unnecessary. We just need to have the Fed say it will do all it can to make capital available to those who need it. But the one segment that doesn't need it, housing, keeps getting it. But no, the Fed's on the move. It wants to prove its relevance even though its relevance in the form of housing, isn't in doubt, and its relevance in the form of the rest of the economy is bordering on the absurd. How absurd? All of the following would be better than another rate cut. Keep in mind, these are fictitious, but all would work better than the Fed's current path. Fed to buy more routers from Cisco. Fed to shut WorldCom/MCI because it is a bad actor and is destroying pricing. Fed to flood world with oil to reduce expenses. Fed to drill for natural gas. Fed to give everyone high-speed Internet connections. Fed to buy lots of airplanes. Fed to order people to start smoking more cigarettes so that deficits can be met. Fed to give California's government $40 billion. Fed to make sun shine on weekends. Fed to buy a lot of General Motors cars. Any one of these absurd points would be better than a rate cut. Any one! But instead we stick with this housing game blowtorch. Pathetic. No wonder hedge funds are bearish. The futility of it all at times does overwhelm one.

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