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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host

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To: marc ultra who wrote (6059)7/17/1998 7:27:00 PM
From: Alan Bell  Read Replies (1) of 42834
 
re: It is interesting that we have lost valuation, may be on the verge of losing sentiment and some economists are starting to talk of negative GDP in the future, something to ponder and something that again makes me wonder about a 4th quarter inflection point possibility once mentioned.

This just doesn't seem like the direction we should be concerned about. My sense is that earnings have been pretty good for 2Q. So far this year, the people projecting low growth have been wrong. We saw it at the end of 1Q and are seeing it again.

But even if GDP tails off, there is a lot of room for the Fed to lower interest rates. Their current rates are much higher than the typical 1.5-2.0% above inflation. They could lower them by a couple of percent. This would stimulate the economy. Of course, since GDP is still high, they won't do this unless they see real signs of a slowdown.

-- Alan
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