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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Lee who wrote (4770)	6/29/1999 10:23:00 AM
From: Mohan Marette	Read Replies (1) \| Respond to of 12475

'morning Lee: Have you seen the New Home Sales numbers yet? I saw the Consumer Confidence #, looks pretty impressive.

To: Lee who wrote (4770)	6/29/1999 10:57:00 AM
From: Andy H	Respond to of 12475

I had thought of using the word disinflationary, too, but was lazy. Re: commodity prices, etc. My point exactly-these are the trends in place and would not be altered if the Fed had kept rates lower and a steeper yield curve in the past few years. Thanks for the links to the Fed stats. I was going from memory yesterday. I don't attribute these crashes solely to Fed policy. Of course, other factors have to be in place. The right Fed policy could cushion or avoid these falls by allowing those "other factors" to right themselves before restrictive fed policy pricks the bubble. Greenspan thought the market was overvalued in Dec 96, but fortunately made only the one quarter point up move in March 97. I think he learned from the damage he created in 1994, particularly in the bond market, to go slow and not be making moves all of the time. Yes, the long rates have been going down for some time, but the spike I referred to was the last several days into the October 8 low. The long rates quickly went higher, despite the easings of the fed funds rate. The hedge fund short covering caused the spike below 5%. It will be interesting how the Fed plays it this year. Normally I have a pretty good guess at where they are going, but this year I just don't know. I see absolutely no reason for a rise, and still feel short rates are about 1% too high.