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To: John F. Dowd who wrote (86586)	8/4/1999 9:43:00 AM
From: Diamond Jim	Respond to of 186894

JFD, I believe the WSJ show a few weeks ago had Toll as the pick of the week.

To: John F. Dowd who wrote (86586)	8/4/1999 10:03:00 AM
From: Robert Douglas	Respond to of 186894

John, Another Mortgage guru said applications were way down as mortg. rates hit 8+% because of the fear of what the Fed might do. Here's another possibility. Mortgage rates are up because of fear the FOMC will NOT raise rates enough to forestall the upcoming inflation. The Federal Reserve really has limited power in determining long-term rates. The market sets these. Long-term rates are very sensitive to the long-range outlook on inflation. The last several years have been Nirvana for low inflation. We have had a rising currency, falling energy costs and recession in Asia. All three of these have ended or are in the process of ending. It seems completely rational to me that the markets would become concerned about the possibility of inflation. Bond investors want a tight monetary policy. It protects their investment. Last year while the Bank of England was raising short rates, bond rates in GB were actually falling. Greenspan is usually a market follower. He is simply following the clues that the bond market is giving him on inflation. If you think these inflation fears are misguided then place some bets and buy bonds. Railing on Mr. Greenspan is not nearly as fulfilling as booking a nice capital gain.