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Politics : Idea Of The Day
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To: James Strauss who wrote (20692)9/25/1998 10:23:00 PM
From: Sergio H  Read Replies (2) of 50167
 
<I'm in equities until Tues or Wed of this coming week, then I'm out again... A 1/2% rate cut is a double edged sword... It gooses the market but also warns of weakening economic conditions... The Coke earnings drop is indicative of a climate of reduced earnings growth...

In the final analysis earnings growth moves prices... Interest rates only provide the background climate... As such, I believe the market is in a general BEAR downtrend with some rallies along the way...>

Hi Jim. Let's pick up where we left off. First of all, let me remind you that I didn't and still believe that an interest rate decline is not a good long term idea for the American economy. More evidence of the havoc that a rate cut will cause has popped up since we last debated. It is interesting and revealing to note that you also do not see the long term benefit of credit easing at this time.

Next, don't be so sure that we're going to see a 1/2% decrease. The rate drop is more of a mandate to save our President than an economic move. What a world we live in, LOL. So, how about a quarter percent drop, to say we did it and move on ? That's how I see it right now.

It's unfortunate the situation that we painted ourselves into. The fed has no choise but to lower interest rates wether or not that course is merited based on US ECONOMIC DATA and not the problems of the world.

Sergio

btw, the Malaysian short term situation has turned sour but it is most worth watching.
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