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Pastimes : The Justa & Lars Honors Bob Brinker Investment Club
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To: MrGreenJeans who wrote (5399)5/27/1999 8:36:00 AM
From: Ian@SI  Read Replies (2) of 15132
 
MrGJ,

IMO, the possibility is absolutely zero. None of those purposes fall within the lawful mandate of the Fed. And I strongly doubt that the current governors will deliberately perform some unlawful act. What's their motive? spite that someone else is getting rich while they're restricted to treasury bills? Not likely.

So what is the possibility Greenspan raises rates to dampen equity speculation? To prevent a stock market bubble?? To slow down the wealth effect??? That in my mind is the wild card tonight.

Finally, the fed has announced a bias to tightening about 17 times. (the last time was the first time that it was made public on the day of the changed bias.) Only one of those occasions led to a rate increase. Source is the talking heads on CNBC. I haven't personally verified the statistic, so I doubt that it is absolutely accurate, but it's probably close. This may further imply, that the possibility of a rate increase is higher when there isn't a bias toward tightening than when there is.

JMHO,
Ian.
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