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Strategies & Market Trends : TA Science Projects & Experimental Indicators
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To: ftth who wrote (226)10/22/1998 11:31:00 PM
From: ftth  Read Replies (1) of 237
 
Another confirming view of the "lower rates mean higher markets" myth:

The above illustration provides an important view of reality when it comes to stock market and interest rates. The myth that lower interest rates are BULLISH for stocks and higher interest rates are BEARISH, is perhaps the single greatest lie of all time. As illustrated here, the Fed raised rates from 3.5% in 1927 up to 6% in 1929 and the Dow Jones DOUBLED. The Fed responded quickly to the debacle of 1929 and lowered rates from 6% to 1.5% within less than 2 years while the Dow Jones collapsed by 70%. In the 1994, interest rates were at the low. The Fed raised rates 8 TIMES between 1994 and 1998 and the Dow Jones again DOUBLED! Now that the Fed is lowering rates, take a look at the above chart one more time just for the hell of it. Ask yourself, Did the Fed lower rates in 1929 because of problems? Is the Fed lowering rates now because of problems?


from pei-intl.com , click on "Ides of October."

dh
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