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To: Jack T. Pearson who wrote (37339)	1/13/2000 1:45:00 AM
From: Jacob Snyder	Read Replies (1) \| Respond to of 99985

good post, especially, "the Fed will over-correct this year. It is the classic control system problem where sampling and control are much quicker than system response." I hadn't thought of it that way, but I think it says it about perfectly. We're already 6 months out from the first hike, with no discernable effect.

To: Jack T. Pearson who wrote (37339)	1/13/2000 11:42:00 AM
From: Fun-da-Mental#1	Read Replies (1) \| Respond to of 99985

Jack, re "the classic control system problem" - I see you're a fellow scientist! Feedback with a time delay leads to oscillation - that's the business cycle. The point you make about the Fed trying to control interest rates reminds me of OPEC's attempts to control oil prices. They open the tap, and oil goes to $10. They close the tap, and oil goes to $27 and counting. If they really wanted to control oil prices they'd have to make adjustments much more slowly, to give the system a chance to reach equilibrium. But it's not a closed system, the supply and demand picture is always changing, so anyway it's hopeless trying to control it. Fun-da-Mental