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Strategies & Market Trends : Value Investing

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To: MCsweet who wrote (5260)11/9/1998 5:12:00 PM
From: gregor  Read Replies (1) of 78817
 
MC: That was a great link. I read the whole thing and some of it was too academic to make a lot of sense, at least to moi.

But one thing that kept passing through my mind is how critical this juncture in the economy is becoming.

If, the feds lower rates again next Tuesday, which I feel they will then we enter into another world of economics that we have not experienced in generations. Short term rates will then approach 4% and less.

Now a few if's. If the economy goes into recession. If the stock market reacts negatively. What do we do for an encore. Monetary policy alone will not pull us out of a recession. We will not have a federal government willing to deficit spend us out of recession. We will not see the Congress give us a whopping tax cut to pull us out, because of the argument we need to save social security.

Then as we sink deeper and deeper credit parameters will tighten to the extent that we will be in big trouble. So we are walking a tightrope.
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