Roger's 1998 Short Picks Message Board

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Strategies & Market Trends : Roger's 1998 Short Picks

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To: Joey Two-Cents who wrote (14634)	10/16/1998 3:21:00 PM
From: BelowTheCrowd	Read Replies (3) of 18691

JTC, Agreed on your analysis. Greenspan has always been methodical and careful, allowing a plan to unfold slowly and have its impact over time. In the longer-term view, announcing an already-anticipated cut just a few weeks early is NOT going to matter much. So I can only presume that the cause of this is some short-term problems he'd like to try to stamp out. When taken in context of his typical approach, this pretty much qualifies as a panic move. And it does make me wonder what he's seeing right now. My guess: * He knows the latest PPI change is a fluke. World-wide trends are down, not up, not even flat. * He knows that once a deflationary cycle starts, interest rate cuts aren't going to do much to bring things back. Just look at the effect of Japanese cuts since their economy started crumbling. * So he's rushing in, trying to prime the pump, keep consumers spending and avoid deflation. IMO, probably too little too late. He needed to do this two years ago. At this point consumers are already scaling back and it's going to take more than 1/4% to make a difference. mg

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