A Rate Cut...Would It Help? Message Board

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Pastimes : A Rate Cut...Would It Help?

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To: GROUND ZERO™ who wrote ()	9/25/1998 3:33:00 PM
From: Les H	Read Replies (2) of 14

Q:Are we getting a rate cut? Probably several. Certainly 1/4 percent by November if not next week. Q:Do we need it? The rate cut is needed because of the inverted yield curve's effects on lending. The key is what systemic problems the Fed is trying to solve. If they have problem investment funds or problem lending institutions, they need to get on them quickly to clean them up. Something Japan didn't do properly because of the Finance Ministry's cozy relationships with the banks. Most of the financial stocks, including banks and brokerages, and the interest-rate sensitive stocks, including mortgage finance, homebuilders, and consumer lending, are still in downtrends. It appears that it will take several rate cuts and a working out of the system of bad loans and investments.

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